Preamble

The House met at half-past Two o'clock

PRAYERS

[MADAM SPEAKER in the Chair]

Oral Answers to Questions — DEFENCE

The Secretary of State was asked—

British Forces (Germany)

Mr. Austin Mitchell: If he will list the annual cost of British forces in Germany (a) gross and (b) net of offsetting arrangements. [36256]

The Secretary of State for Defence (Mr. George Robertson): I estimate the total cost in the previous financial year of our armed forces based in Germany to be about £1.3 billion, the vast majority of which would arise wherever those forces were based. There is no offset agreement with Germany, although the armed forces benefit from barracks, some quarters and training areas, for which no charge is made.

Mr. Mitchell: I am sure my right hon. Friend would agree that that is still a substantial cost across the exchanges for a nation that has a trade deficit with the European Union. The forces were placed in Germany because of the Soviet threat, so the important question is

this: as that threat no longer exists, as NATO is being enlarged to the Polish border and as the French are about to withdraw the great majority of their forces from Europe, is it any longer right to keep about one quarter of the British Army in Europe? Should we not bring it home?

Mr. Robertson: It will come as news to the French that they are about to withdraw their troops from Europe—perhaps my hon. Friend's obsession with the subject is getting the better of his grasp of the facts. As I said, the vast majority of the expenditure would have been required wherever the forces were based. Indeed, it is estimated that the additional costs of basing the Army in Germany last year were only about £150 million, in return for which we have leadership of the Allied Command Europe rapid reaction corps, we maintain our substantial influence in NATO, we show solidarity with our allies and we improve the multinationality of training with our allies to face any threat, whether on the continent of Europe or elsewhere.

Mr. John Wilkinson: Does not the disproportionately large cost of stationing a substantial part of, in particular, our Army in Germany distort Britain's defence posture as a whole? Would not at least part of that money be better spent on providing instruments for flexible intervention overseas, such as heavy lift transport aircraft?

Mr. Robertson: Unless the hon. Gentleman wants to bring all the troops back from Germany and disband the division that is currently located there, he makes no case. The 1st Armoured Division, which is based in Germany, is fully required and plays a positive role. Although there may be scope for changes in the size of our garrison in Germany, we believe that a substantial majority of our troops should stay there. If we brought back our troops from Germany but did not disband the organisations that were there, the British taxpayer would face substantial


costs in building new barracks. Moreover, many extra training facilities in this country would be needed, as that resource is currently at a severe premium.

Ms Rachel Squire: I was, indeed, about to ask my right hon. Friend whether he agreed that, if we withdrew all our armed forces from Germany, we would have to find loads of money to build new barracks and other facilities. Would it not also be difficult to find enough training areas, of which, thanks to the previous Government, there is already a shortage?

Mr. Robertson: My hon. Friend makes a perceptive point. It is estimated—by the previous as well as the present Government—that it would cost about £2.5 billion in extra infrastructure and training ground to bring all our troops back from Germany. In addition, we would lose considerable influence in NATO and in the NATO tasks that British troops currently carry out. At a critical time in NATO's history, we would be breaking solidarity with the Americans who are still there, as well as with the Germans and all our other allies.

Malaysia

Mr. Crispin Blunt: If he will make a statement about the state of defence relations with Malaysia. [36258]

The Parliamentary Under-Secretary of State for Defence (Mr. John Spellar): The United Kingdom's defence relations with Malaysia are very good. We are both members of the five-power defence arrangements and we also have important bilateral links.

Mr. Blunt: Was it wise of the Minister for Defence Procurement, when arriving in Malaysia to lead the British delegation to the Langkawi international maritime exhibition, to ignore the Malaysian Government representative waiting to greet him at the aircraft steps and spurn the travel arrangements made by the Malaysian police and the British high commission—whereby he was to travel to his accommodation in the high commissioner's Rolls-Royce with a Malaysian police escort—instead instructing his staff to arrange for a self-drive hire car? When he left the airport in his soft-top daffodil-yellow Fiat Punto, did the Malaysian police follow him through concern for his safety or through curiosity?
Is it right for the actions of a Minister of the Crown to have to be explained away to senior Malaysian Ministers, by senior figures in the very industry that he is supposed to represent, as those of a harmless eccentric?

Mr. Spellar: I was going to say that that was not the sort of question that one would have expected from a former adviser in the Ministry of Defence, but perhaps it was. We have had nine months of the strategic defence review. We are discussing the sale of defence equipment with the Malaysian Government, and we are about to sign a memorandum of arrangement on defence with them. We also provide considerable training for the Malaysian forces. Those are the issues that concern the Malaysian Government, with whom our relations are extremely good, especially after the enormously successful

Asia-Europe summit, in which my right hon. Friend the Prime Minister and the Government played an important role.

Aircraft Carriers

Mr. Lindsay Hoyle: If he will make a statement on fixed-wing aircraft carriers.[36259]

The Secretary of State for Defence (Mr. George Robertson): The requirement for aircraft carriers has been considered as part of the strategic defence review but final decisions have yet to be taken.

Mr. Hoyle: I welcome that answer. Obviously, there is hope for a fixed-wing aircraft carrier, which would be a major shot in the arm for British shipbuilding and allow us to consider Eurofighter as a Fleet Air Arm variant, which would also bring benefit to British Aerospace.

Mr. Robertson: That would be considered further down the line, if a decision in principle is taken on aircraft carriers. I saw HMS Invincible coming into Portsmouth last week at the end of a tour in the Gulf and could not but feel proud at the role of the ship's crew and of the embarked Royal Air Force Harriers. They certainly played a substantial part in obliging Saddam Hussein to back down from his confrontation with the United Nations. The issue is deeply important involving not only the, construction of aircraft carriers but the decision about what aircraft are to go on them.

Mr. Menzies Campbell: In order to learn proper lessons for the future, would it not be honest to acknowledge that we only just escaped the serious political and military embarrassment in the Gulf of a British aircraft carrier being unable to operate effectively in combat because of restrictions on the GR7 Harrier aircraft as a result of the climate?
Do not the lessons of the past six months teach us that, if Invincible, Illustrious and Ark Royal are to be replaced, there should be three new vessels? To ensure that they are fully effective, is it not necessary to ensure in turn that the aircraft carried are capable of operating in all climatic conditions?

Mr. Robertson: There is no embarrassment involved in looking carefully at what range of forces we might have in the Gulf at any point. At the end of last week, we simply announced an adjustment in our force levels in the Gulf. We are not letting our guard down for a moment. The danger and the threat have not gone away. We will not reduce our vigilance until we are absolutely satisfied that Saddam has provided the evidence to assure us that he has destroyed all his weapons of mass destruction.
The hon. and learned Gentleman mentioned the performance of some aircraft in the extreme heat of the Gulf. That is not new. The effectiveness of Harriers, like that of all other aircraft, declines in the Gulf summer; its ability to hover and land on carriers is affected by the extreme heat. We have made it clear that, by sending additional Tornados to Kuwait, we have in no way diminished the threat that we pose to Saddam if he continues his unnecessary confrontation with the United Nations.

Mr. Robert Key: Given that there are six shipbuilding yards in the UK capable of building vessels of more than 40,000 tonnes, some of which have state-of-the-art, high-technology, computer-assisted design for naval ships, as I discovered at Yarrow on the Clyde last Friday, will the Secretary of State take the opportunity to deny the persistent information that the Ministry of Defence would consider ordering aircraft carriers from Poland?

Mr. Robertson: That can only be a delusion held in the hon. Gentleman's mind. I am sure that the management of Yarrow cannot have been the source of that rumour. In the strategic defence review, we are examining the requirement that we might have for successors to our three Invincible-class carriers, and, if we decide to go down that route, what size they might be and what aircraft they would take. We are well aware of the shipbuilding and ship repair capability in this country, which is among the finest in the world.

Strategic Defence Review

Sir George Young: What representations he has received from defence equipment manufacturers about the strategic defence review's implications for defence procurement. [36260]

The Secretary of State for Defence (Mr. George Robertson): The strategic defence review has been characterised by its inclusive nature. Detailed work has been carried forward in conjunction with industry in seminars and working groups. I have received views from trade associations, through the National Defence Industries Council, which I chair, as well as contributions from individual companies.

Sir George Young: Will the Secretary of State apologise to this country's defence equipment manufacturers for his Government's appalling performance in processing export applications for licences? Is he aware that they are fighting with one hand tied behind their back? He inherited a figure of 97 per cent. of applications processed in 10 days. That figure has now slumped to some 60 per cent. Will the outcome of the SDR ensure that we revert to the figure that he inherited—and on delays, can he say when the SDR will be published?

Mr. Robertson: I am not going to apologise for anything. It takes the biscuit to hear Conservative Members, who are in opposition partly because of their record on arms export licences, complain about the time taken to scrutinise properly the supervision of arms sales. One reason why the right hon. Gentleman and I are in our respective positions is that the Scott report uncovered the way in which the previous Government gave arms licences willy-nilly. They paid a rich penalty for that.
On the most recent information available, I understand that the position on licences is improving, following the introduction of a much tighter arms licences regime: 52 per cent. of applications circulated to other Departments are now cleared within the 20-day target, compared with 48 per cent. last October. We will continue to take the greatest care possible to ensure that when we

issue licences we are certain that the equipment will not be used for internal repression or external aggression. The public expect us to do precisely that.

Mr. Harry Cohen: In respect of the strategic defence review, will my right hon. Friend ensure that his own enthusiasm for defence and the lobbying of defence equipment manufacturers do not result in extra costs for the British taxpayer?

Mr. Robertson: My enthusiasm for defence and the defence of this country is undiminished—indeed, such enthusiasm on the part of the Government as a whole was one of the reasons why my hon. Friend and I did so well at the last general election. However, I have an obligation to make sure that all the money spent on defence is spent properly and wisely. That point was made by my predecessor, Mr. Michael Portillo, who, in a magazine article at the end of last year, wrote:
There is money to be saved in MOD.
I shall make sure that we use the budget that is there and the budget that was promised during the election for the maximum, most effective defence of this country. That is what we were elected to do and that is what we shall continue to do.

Mr. Ian Taylor: In an earlier answer, the Secretary of State referred to biscuits; I hope that that is not all he intends to procure as a result of the defence review. On a matter that causes concern to defence manufacturers, will he assure the House that, when evaluating procurement, he will take into account technology and research into technological developments that needs to be carried out in this country?
Given the decline in the amount of money spent on research and development by the Ministry of Defence and the importance of our staying at the cutting edge of competitiveness in both defence and civil industries, the right hon. Gentleman has a tremendous responsibility to ensure that we do not lose out on a key stage of technological development simply because of cuts that his Department may be contemplating.

Mr. Robertson: The hon. Gentleman highlights the fact that, under the previous Government, research expenditure was substantially reduced. I attacked that when in opposition, and I maintain my position in that respect. I am well aware that my Department is one in which research plays a big part in procuring the right equipment at the right price and at the right time. We shall ensure that that priority is maintained and built on.

Mrs. Gwyneth Dunwoody: Does my right hon. Friend remember that it was the previous Government who arranged to put individual manufacturers at risk of prosecution and prison by cheating on the issue of arms permits? Will he make it clear to those involved in the defence industry in this country that the Government have no intention whatever of allowing little deals to be struck between Ministers at the Department of Trade and Industry who turn a blind eye and Defence Ministers who have neither responsibility nor morals?

Mr. Robertson: My hon. Friend makes a valuable point. I assure her that our policy is designed to make sure


that, when the best products of the British defence industry are exported, they are not misused. We shall not turn a blind eye to the end use of that equipment.
My hon. Friend allows me, at this point, to make a fairly substantial announcement in connection with equipment sales. I am pleased to announce that the Government of Canada have today declared their intention, subject to final negotiations, to lease for eight years all four of the Upholder-class submarines currently berthed in Barrow. That is yet another of this Government's successes in selling something that the previous Government could not sell.
Canada has chosen to acquire the submarines via a lease with an option to purchase, as that is the most satisfactory solution for it. The arrangement is worth 610 million Canadian dollars to the United Kingdom. Work will be generated for various UK companies in reactivating the submarines and for GEC Marine at Barrow, which will provide technical and logistic support, including the provision of training to Canada. This is a piece of good news for this country, and I am sure that the Opposition will want to share in that good news for Britain.

Gulf War Syndrome

Mr. Elfyn Llwyd: What his current estimate is of the number of service men and ex?service men affected by Gulf war syndrome; and if he will make a statement.[36261]

The Minister for the Armed Forces (Dr. John Reid): There is still no medical or scientific consensus about the nature of illnesses among Gulf veterans. Any statistical verification of such illnesses and the difference between Gulf veterans and the general population will have to await the outcome of the epidemiological studies. However, I can tell the hon. Gentleman that, so far, 2,592 individuals have sought a referral to the Ministry's medical assessment programme.

Mr. Llwyd: I thank the Minister for that response and for the written replies that I have recently had from him. I know that he is taking a close interest in this subject, but will he ensure that the reviews and the investigation are dealt with urgently? In the meantime, will he confer with colleagues to ensure that the treatment available for those suffering from that syndrome is the same throughout the UK? At the moment, it is a lottery, as the treatment varies depending on where one lives. Will he pursue a policy that encourages more co-ordination?

Dr. Reid: On the hon. Gentleman's second point, we have already written to general practitioners throughout the United Kingdom telling them that any Gulf veteran who reports to them should not be dismissed out of hand, and referring them to the medical assessment programme. On the general seriousness with which the Government are treating the matter, even our worst enemies would admit that the effort put into it has been unparalleled in terms of our openness, our dialogue with the veterans, the resources allocated to the medical assessment programme, the continuation of the epidemiological studies already started, the inauguration of new studies into vaccines, and

the publication of a huge amount of material on organophosphates and vaccines, to ensure that Gulf veterans are kept fully informed.

Laura Moffatt: Is my hon. Friend in a position to publish the scientific studies on dead animals found in the Gulf? Would that have a bearing on those suffering from Gulf war illnesses?

Dr. Reid: I am in a position to do so. Earlier today, I published another paper, which details the outcome of the Ministry's review of information relating to dead animals in the Gulf. It had been requested by the hon. Member for Salisbury (Mr. Key), among others. On the basis of contemporary reports and eyewitness accounts, no evidence has been found to suggest that the presence of dead animals in the Gulf—the theatre of operations during the 1990-91 conflict—was related to the use of chemical or biological weapons. We remain of the view that there is no confirmed evidence of the use of chemical or biological weapons by Iraq in 1990-91.

Mr. Nicholas Soames: May I congratulate the Minister on the way in which he and his staff are pushing ahead with what is a fiendishly complicated and difficult project? Does he agree that one of the difficulties of keeping Gulf war veterans accurately informed is that most of the studies, including those started under the previous Government, are very long term because of the complicated nature of the matters that they assess? When does he anticipate receiving the first detailed epidemiological survey relating to the Gulf war veterans?

Dr. Reid: As a general proposition, I agree with the hon. Gentleman about the wide range of the matters under consideration. Almost everyone to whom one speaks has his or her own theory about what may have caused a group of illnesses that may or may not be related.
It was anticipated that the outcome of the epidemiological studies would be available in a couple of years' time. However, difficulties are being encountered by the Medical Research Council and others in identifying exactly where every Gulf veteran is. We are doing what we can to help, but unfortunately, in our attempts to gain access to the addresses of all those who served in the Gulf, we are coming up against difficulties with the data protection legislation and the agencies implementing it. I urge members of Her Majesty's forces who served in the Gulf to write to the Ministry of Defence with their present address so that we can pass it on to those carrying out the epidemiological studies.

Smart Procurement Initiative

Mrs. Betty Williams: If he will make a statement on the Government's smart procurement initiative. [36262]

The Parliamentary Under-Secretary of State for Defence (Mr. John Spellar): Smart procurement is a ruthless examination, in conjunction with industry, of how value for money from our procurement programme can be improved to ensure faster, cheaper and better delivery


of our future requirements. Our improved business practices will be good news for the armed forces, for industry and for the taxpayer.

Mrs. Williams: Can my hon. Friend assure the House that, whatever the outcome, the strategic defence review will reform the way in which we procure equipment for our forces, and will eliminate as far as possible cost overruns, delays and waste, which were the hallmarks of the previous Tory Government?

Mr. Spellar: We are all very much aware of the reports from the National Audit Office on cost and time overruns. They have made embarrassing reading not only for Government but for industry as well. We aim to reform that process and get to our armed forces the right kit, at the right time, at the right price.

Sir Geoffrey Johnson Smith: The Government will be aware of the growing serious threat from long-range ballistic missile systems. Can the Minister confirm that the Government are seriously examining the possibility of setting up a national ballistic defence system?

Mr. Spellar: Yes, I can certainly assure the right hon. Gentleman that we are keeping this matter constantly under review and are undertaking the necessary studies to that effect.

RAF Menwith Hill

Mr. Norman Baker: What mechanism is in place to ensure that information gleaned from interception of communications by US forces at RAF Menwith Hill is not used in a way that is prejudicial to the interests of the UK. [36263]

The Minister for the Armed Forces (Dr. John Reid): United Kingdom personnel are integrated into every level at RAF Menwith Hill, and we can therefore be confident that no activity prejudicial to United Kingdom interests is carried out there.

Mr. Baker: Can the Minister confirm the veracity or otherwise of the statement in the report prepared for the European Parliament, "Assessing the Technologies of Political Control", which suggests that all telephone, fax and e-mail communications within Europe are routinely monitored by United States forces based at RAF Menwith Hill? Given that such activity is expanding at a rate of knots and given that the cold war is over, it is reasonable to assume that it is done for non-military purposes. Can he confirm that the UK Government have access to all intercepts at RAF Menwith Hill? If he cannot, how could he give the assurance that he just gave?

Dr. Reid: The hon. Gentleman would not expect me to comment on a report that I have never seen or, indeed, heard of—far less vouch for its veracity. RAF Menwith Hill is a communications facility, and there is total integration of United States and United Kingdom staff there. There is not only parliamentary accountability but accountability through the Intelligence and Security Committee, and not least from the hon. Gentleman. Of the

thousands of questions that he has tabled since entering Parliament—at up to £600 a time—more than 20 on this matter have had my personal attention.

Defence Diversification

Mr. John Hutton: What representations he has received on the Government's Green Paper on defence diversification. [36264]

The Parliamentary Under-Secretary of State for Defence (Mr. John Spellar): We have so far received three formal representations on the consultative Green Paper since its publication on 5 March. The consultation period runs until 8 May.

Mr. Hutton: I welcome the Secretary of State's announcement today on the sale of Upholder submarines, which is welcome news for jobs in my constituency.
I welcome the Government's commitment to making their policy on defence diversification a success. Is it not a fact that the previous Government did absolutely nothing to facilitate defence diversification, and that that failure resulted in the failure of British companies to exploit such cutting-edge technology as liquid crystal displays, which were invented in the United Kingdom but exploited elsewhere? Was not that failure to act a total betrayal of defence workers throughout the country who lost their jobs under Tory Governments?

Mr. Spellar: I regret that I have to agree with my hon. Friend. Unfortunately, it was yet another case in which the previous Administration allowed dogma to override the interests of the industry. That is why our Green Paper on defence diversification has been widely welcomed not only by those who work in the industry but by many of the companies involved in it. It provides an excellent way forward for the defence community, and particularly for the huge amount of technology and scientific research that has been undertaken in our laboratories.

Mr. Gerald Howarth: I thank the Minister for his courtesy in sending me a copy of the Green Paper at the time of its publication. Owing to a misunderstanding, I was critical of him at that time; let me put things right now.
Having said that, I cannot allow what the Minister has just said to go without challenge. What we have heard from him, and from his hon. Friend the Minister for Barrow and Furness (Mr. Hutton) is a travesty of the truth. Is he not aware that his own Green Paper encourages the Defence Evaluation Research Agency, which is based in my constituency, to continue doing what it has done so effectively up to now—sharing its technology with the civilian industry?
Does the Minister not realise that what really concerns industry is the future structure of DERA? I wonder whether he agrees with the chief executive of Messier-Dowty, Tony Edwards, who not only described DERA as a vital national asset but said:
privatisation would …result in … further competition and distancing from industry.

Mr. Spellar: I am interested that the hon. Gentleman should take such an attitude to privatisation. It will cause some merriment among certain of his colleagues.
I thank the hon. Gentleman for the gracious apology that he made at the beginning of his question. Let me point out, however, that DERA is based not just in his constituency—although it has a substantial presence there—but in other constituencies throughout the country, including that of one of his Front-Bench colleagues. I am sure that the hon. Gentleman would want me to correct that.
It is undoubtedly true that DERA has been undertaking some useful work in spreading the technology it has, but DERA itself would acknowledge that that work could be much improved. We provide the mechanism for such improvement in the Green Paper, as well as a mechanism to give a much-needed boost to industry. I am thinking particularly of the exciting initiative allowing science parks to be attached to the laboratories. That is good news for constituencies across the country, and particularly good news for the hon. Gentleman's constituency. I hope that he will be more gracious about it next time he asks a question.

Gulf Presence

Helen Jones: What representations he has received about the deployment of British troops to the Persian gulf. [36265]

The Secretary of State for Defence (Mr. George Robertson): My Department has received a significant amount of correspondence about the deployment of British forces in the Gulf. I have taken careful note of the variety of views expressed.

Helen Jones: I thank my right hon. Friend for his reply. Will he confirm that the temporary withdrawal of HMS Illustrious from the Gulf should not be seen by Saddam Hussein as a sign of any weakening of resolve on the part of either this country or the United Nations? To ram that message home, will my right hon. Friend tell us how he intends to balance the temporary removal of HMS Illustrious with other reinforcements in the gulf?

Mr. Robertson: I can assure my hon. Friend, the House and anyone who may care to listen that our resolve has not diminished one bit in the Gulf, and in our posture towards Saddam Hussein. The access that Saddam has now given to all the sensitive sites that he blocked earlier this year demonstrates the clear victory that was scored for diplomacy backed by the threat of force. We shall therefore be putting additional Tornado aircraft into the Ali al Salem base in Kuwait—with the kind agreement of the Kuwait Government—to "sharpen" our posture, and to remind Saddam Hussein of his obligation to deliver on what he himself agreed to when the Secretary-General of the United Nations went to Baghdad. We are reviewing the composition of our forces to ensure that we have the best mix for the job, and Saddam Hussein should interpret that in only one way—to mean that our vigilance remains exactly the same as it was, and that our resolve continues to be at the highest level.

Mr. Andrew Robathan: Following the work of the UN inspectors, does the Secretary of State still believe that our British troops deployed in the Persian gulf are threatened by nuclear, biological and chemical warfare?

Mr. Robertson: The fair assessment at present is that, as long as the danger remains, the precautions that have been established must continue. We still want the troops in theatre to take advantage of the anti-anthrax vaccine that has been made available to them. Saddam has still not convinced the United Nations Special Commission, the United Nations or the rest of the world that he has destroyed all his capabilities for producing and using weapons of mass destruction, and that is precisely why we still have forces in the Gulf with those of our allies.

Mr. Jim Marshall: May I press my right hon. Friend a little further on the question of British troops—and American troops, for that matter—in the Gulf? In the light of the successful inspection of the nine presidential sites by the UN last week, can my right hon. Friend give some idea of the criteria that he will use before British troops are withdrawn? It seems to some of his right hon. and hon. Friends that this is the right time for the withdrawal to begin.

Mr. Robertson: No. We are not yet satisfied that Saddam has provided clear indications that he will abide by the agreement that he signed, and we have not yet been provided with the evidence to be sure that he has destroyed his weapons of mass destruction. There would have to be a clear pattern of Iraqi compliance over time for our posture to be diminished in any way, because reducing our force posture might give him some indication that he could get away with more by confrontation. Last week, I had a long discussion with Ambassador Butler, the executive chairman of UNSCOM, on that subject. I assure my hon. Friend that the fate of the sanctions against Iraq and of Saddam himself lie in his own hands—all he has to do is comply and provide evidence of it; then the world position would rightly be different.

Sir George Young: We welcome the deployment of forces that the Secretary of State has announced. Will he say more about the progress that has been made since the agreement between Kofi Annan and Saddam Hussein? How many visits have been made, what banned materials were unearthed, and how much of those materials have been destroyed? Is continued progress being made to broaden support for the alliance in the Gulf, which is led by the United Kingdom and the United States?

Mr. Robertson: The right hon. Gentleman will know of the support for the posture that we rightly and properly took from the beginning in putting in place the force that made diplomacy work in the agreement signed with the Secretary-General. The right hon. Gentleman gave his support at that time, but since then the Secretary-General has clearly underlined the fact that, although diplomacy can achieve a lot, it can achieve a lot more if it is backed


by firmness and by force. That is why we joined the Americans in the Gulf, and why a large number of our allies then gave logistical and physical support.
The right hon. Gentleman will know that most of the sensitive sites inside Iraq have been inspected in the past couple of months. Ambassador Butler is satisfied that the inspections have taken place and that access has been given in a way that was denied until now. UNSCOM reports directly to the United Nations, so I am not in a position to give full details of what was or was not found. We are not yet satisfied that we have the evidence that Saddam has destroyed the weapons of mass destruction and the capability to produce them that he undoubtedly had in the past. Until then, our state of vigilance will be maintained.

Ann Clwyd: I agree with my right hon. Friend's assessment of the situation in Iraq. There has been a lot of support from Ministers and Conservative Front Benchers for the campaign to indict Saddam as a war criminal for crimes against humanity and for crimes of genocide. It would take only one country to indict him. Why do we not take the lead?

Mr. Robertson: There is no forum yet established in which we could indict Saddam Hussein for war crimes. The proposed international criminal court, the establishment of which the Government firmly support, would have a remit only over the countries that agreed to abide by it. Sadly, I am pretty sure that Saddam Hussein's Iraq is unlikely to be a signatory, but we shall continue to support the Indict campaign.
I assure my hon. Friend that we have a number of strategies in relation to Iraq, based not only on the tough military posture of our troops who are giving great service to the country in the Gulf, but on the political front. We are especially concerned to ensure that the people of Iraq realise that our argument is not with them, but with the regime. My right hon. Friend the Foreign Secretary is making strenuous efforts to convene an humanitarian conference to ensure that we get through to the ordinary people of Iraq the help that the world community wants to direct to them.

Royal Air Force (Commemorations)

Dr. Julian Lewis: What plans the Government have to commemorate in the UK the 80th anniversary of the Royal Air Force and the 50th anniversary of the Berlin Airlift.[36266]

The Parliamentary Under-Secretary of State for Defence (Mr. John Spellar): I am delighted to have this opportunity to pay tribute to the Royal Air Force and to all those who support it. A number of events are planned to mark the 80th anniversary of its foundation and the 50th anniversary of the Berlin airlift.

Dr. Lewis: I am delighted to hear that the Government plan to recognise these events. Do the Government realise the intensity of pride that the British people take in such anniversaries? Will the Minister be a little more specific about the events that he has in mind? Events to mark these anniversaries have been carried out and are planned in my constituency. It would be a shame if more was taking place in one constituency than in the whole of Whitehall.
Will the Minister consider the representations of the British Berlin Airlift Association, which wants the Royal Mail to issue a commemorative stamp to mark that crucial turning point in the war? That suggestion has so far been given an idle brush-off.

Mr. Spellar: I cannot accept that. I have had discussions with the Department of Trade and Industry, which, as the sponsoring Department, is discussing this matter with the Post Office. The Berlin airlift, which was authorised and instigated by that great Labour Foreign Secretary Ernie Bevin and of which we should rightly be proud, should be properly marked. A number of veterans will be going to Berlin, as will the Secretary of State. The 80th anniversary of the RAF is being marked, and both that anniversary and the airlift will be celebrated at the Fairford flying display in July. We tend to mark such anniversaries in blocks of 25 years, so although we shall have a number of events, they will not be on such a scale as for the 75th or the 100th anniversary.

Mr. Andrew Dismore: May I remind my hon. Friend that the RAF museum in my constituency recently celebrated its 25th anniversary? The museum has been working closely with the British Berlin Airlift Association and intends to mount exhibitions at Hendon and at its outstation at RAF Cosford to mark the anniversary of the Berlin airlift. Madam Speaker, you and any hon. Member who can find time in busy schedules to visit the museum to see what is planned will be more than welcome.

Mr. Spellar: Given my hon. Friend's remarks, I am sure that he will find that it pays to advertise. Those of us who recently visited the museum were impressed by the work that it is undertaking. We were pleased to support its lottery bid, and we believe that it has a great future in representing the proud and noble tradition of the Royal Air Force.

Territorial Army

Mr. Keith Simpson: What assessment he has made of the operational effectiveness of the Army if the Territorial Army's manpower were reduced to 40,000 personnel.[36267]

The Minister for the Armed Forces (Dr. John Reid): The strategic defence review is, as the hon. Gentleman knows, looking at a range of options to improve the operational effectiveness of the Army, covering both the regular and reserve forces. No decisions have yet been taken.

Mr. Simpson: I am sure that the Ministers and hon. Members on both sides of the House will agree that the role of the Territorial Army volunteer reserves is of fundamental importance not only for its link with society, but for the active support that it gives to the regular Army. Discussions are taking place within the Ministry of Defence on savings from the Territorial Army through manpower cuts because the regular Army is under such pressure. Does the Minister accept that, if the formed infantry and armoured regiments of the Territorial Army are reduced, perhaps to the level of merely a pool of


infantry and armour, recruitment will be drastically affected, and the effectiveness of our regular Army will suffer as a consequence?

Dr. Reid: I fully recognise not only the operational capability that the TA gives the British armed forces, but the regeneration, the assistance of cadets and the military-civil link.
If the hon. Gentleman starts from the standpoint that savings are to be made and that we must therefore make cuts, he repeats a mindset that is more indicative of the previous Government than of this one. We do not start with a target for cuts nor with a number and then justify it. We start with an analysis of the security and strategic environment in which we find ourselves and from that we derive our planning assumptions, from which we derive force configurations, including those for the Territorial Army.

Ms Christine Russell: Does the Minister agree that, in the light of changed world circumstances, it is right to re-examine the role of the TA? As I have a large TA presence in my constituency, I should like the Minister to at least consider giving the TA a more heavyweight role.

Dr. Reid: I thank my hon. Friend for her helpful intervention. She is absolutely right. We should consider giving the Territorial Army a more useable, more relevant and, as she says, a more heavyweight role in that context. She is also right to say that the starting point should be the shaping of force structures according to our defence needs. She starts from the point of view of a strategic analysis, and that starting point is shared by all Labour Members and, I hope, many Opposition Members, but apparently not universally.

Several hon. Members: rose—

Madam Speaker: Order. I am sorry: time is up. Time waits for no man or woman.

Oral Answers to Questions — HOUSE OF COMMONS

The President of the Council was asked—

Working Hours

Mr. Rhodri Morgan: What evidence the Government have submitted to the Modernisation Committee in its examination of the working hours of the House. [36291]

The President of the Council and Leader of the House of Commons (Mrs. Ann Taylor): The Government plan to submit a memorandum on the parliamentary calendar to the Modernisation Committee shortly after the Easter adjournment.

Mr. Morgan: I thank the President of the Council for that reply and assure her that she will get support from virtually all quarters of the House in her efforts to modernise the House and its working hours. The recent all-night sittings may or may not be wondrous examples

of antediluvian, macho, arm-wrestling exercises, but they certainly do not provide high-class parliamentary legislative scrutiny.

Mrs. Taylor: I thank my hon. Friend for his support and for his remarks. I think that there is a great deal of support for the idea of improving House hours, but when it comes to working out the detail of the changes, there is not yet complete agreement.

Sir Patrick Cormack: When the right hon. Lady submits evidence, will she give some idea of what the Government think is a proper allocation of time for Ministers to spend in the House? Is she aware that there is considerable concern in the House and outside about the rare appearances by the Prime Minister other than on Wednesdays and about the fact that he has voted in about 12 Divisions—5 per cent. of the Divisions that have been held since May of last year? He has treated the House with scant regard and has attended it far less than any of his predecessors this century. What does she intend to do about that?

Mrs. Taylor: I have no intention whatever of including such items in my memorandum, and I do not recognise the concerns that the hon. Gentleman says exist outside or, indeed, inside the House about the attendance of Ministers. The hon. Gentleman asked about my right hon. Friend the Prime Minister. I should have thought that hon. Members in all parts of the House would realise that he is leading a Government who are making important decisions. At this time when many Ministers are involved in reaching settlements on delicate situations, such as the one in Northern Ireland, it is quite right that the Prime Minister should spend his time on such a matter.

Mr. David Winnick: I do not remember many Tory Prime Ministers attending the House much over the past 18 years. Does my right hon. Friend find it understandable that people outside cannot understand why we spend many hours in the evening and sometimes during the night, yet break up for a long period, sometimes for as much as three months or more during the summer? Would it not make much more sense to have a working arrangement under which the summer break was six weeks at most? Under such an arrangement, it would not be so necessary sometimes to work through the night.

Mrs. Taylor: I am not sure that the relationship between the length of the recess and the length of our individual sittings is quite as simple as my hon. Friend suggests. To perform our responsibilities of scrutiny, it is important that we strike a balance between sitting days, sitting weeks and the passage of legislation. We could examine recess dates, which I should like to make more family-friendly. I think that all hon. Members realise that, as soon as we consider changing the hours or weeks that the House sits, there will be knock-on consequences throughout the legislative process. We have to be aware of those consequences.

Conduct in the Chamber

Mr. David Amess: What representations she has received on the conclusions of the report on conduct in the Chamber of the Select Committee on Modernisation of the House of Commons (HC 600). [36292]

The President of the Council and Leader of the House of Commons (Mrs. Ann Taylor): A number of people, within and outside the House, have commented favourably on the report.

Mr. Amess: Although I broadly welcome the report on conduct in the Chamber—particularly its reaffirmation that the Chamber should be the bedrock of our democracy—does the right hon. Lady share my concern that dress rehearsals seem to be occurring before Question Time? That was clearly demonstrated last Monday, when I myself was invited to such a dress rehearsal for Home Office questions. Does she also share my concern that many commentators are saying that—since 1 May, in the cause of modernisation—the Chamber seems to be slowly dying, as more is now reported first outside the House than to the House?

Mrs. Taylor: When their party is in government, hon. Members on both sides of the House attempt to get information before Question Time, to make their questions more relevant. There is nothing new in that. No, I do not think that the Chamber is dying. Presence in the Chamber is an important part of hon. Members' day, but it is not the whole of their commitment—not least because we now have more Committees, probably, than ever before. Hon. Members have to balance their time between the House, Committees and their constituencies.

Mr. Peter L. Pike: Does my right hon. Friend believe that it would be useful for the House to debate that report, which I think—without bias, as a member of the Committee—is a good one? Does she also agree that, although the report is specifically aimed at conduct in the Chamber, many of its comments are equally important and relevant to behaviour and procedures in Committee?

Mrs. Taylor: My hon. Friend is right. He is well aware—not least because of his significant contributions to the Committee—of the wider ramifications of some of the points in the report. I am still hoping that it will be possible, between our return from the Easter recess and the Whitsun recess, to debate the Committee's more recent reports. I hope that that will be possible.

Oral Questions

Mr. Norman Baker: What representations she has received on the conclusions of the Select Committee on Modernisation of the House of Commons in respect of oral questions (HC 600). [36293]

The President of the Council and Leader of the House of Commons (Mrs. Ann Taylor): Although I have received a number of favourable comments on the report generally, I have not received any comments specifically on oral questions.

Mr. Baker: Perhaps I can ask the President of the Council one now. As she knows, Opposition Members are all great fans of the Minister without Portfolio, and are delighted to have pushed up his Question Time from nothing, to five minutes, and then to 10 minutes. However, there is no slot in which to ask oral questions on his wider responsibilities. Is she aware that, in the previous Parliament, the then Deputy Prime Minister, the right hon. Member for Henley (Mr. Heseltine), had a slot to answer oral questions on his responsibilities for co-ordinating and presenting Government policy? Should not that model be followed by the Minister without Portfolio?

Mrs. Taylor: I have explained to the hon. Gentleman on several occasions that the Minister without Portfolio answers questions on topics for which he is the lead Minister. He is not the lead Minister on other topics; therefore, other Ministers are accountable to the House for those subjects. Current arrangements are working quite well.

Mr. Nicholas Soames: The right hon. Lady will know that I wrote to her to congratulate her on some of the measures that she has taken already in reforming the House. Does she agree that it is important that new Members should perhaps spend some time in the Chamber and in the House generally before they pass too many comments on how we should conduct our affairs in future?

Mrs. Taylor: I think that we not only have experience to impart to new Members but something to learn from them. We have found on the Modernisation Committee that, if we take a balance of views between new Members and more experienced Members, it is not always a matter of one group against another. We need a variety of experience, but also the freshness of thought that sometimes comes from new Members.

Divisions

Mr. Andrew Robathan: What is her policy regarding electronic voting in divisions.[36294]

The President of the Council and Leader of the House of Commons (Mrs. Ann Taylor): The Modernisation Committee has recently agreed to circulate a questionnaire to hon. Members seeking their views on the current voting system and a variety of possible alternatives.

Mr. Robathan: Did not a lot of the pressure to change the voting system come from new Members who were elected last year and imagined that they were coming into a cosy nine-to-five job, but discovered that they were expected to work rather harder? They were bemused to discover how hard they had to work. Have they not now discovered that, in the Division Lobby, they can catch the ear of Ministers—although not, of course, the ear of the Prime Minister, because he is never there—or, in our case, the ear of shadow Ministers, sadly, learn something and get the chance to lobby Ministers? Therefore, will the right hon. Lady please ensure that time-hallowed and extremely valued practices are not ditched just for the convenience of people who do not really understand?

Mrs. Taylor: I think that the hon. Gentleman's early comments were downright insulting to new Members, who did not come here with any illusions about having a cosy nine-to-five existence. If we can improve our voting procedures, we would be foolish not to look to do so, but he will be aware—because he will have read, I am sure, our earlier reports and comments—that Modernisation Committee members think that we should retain the

principle of voting in or around the existing Division Lobby, even if we go towards some form of electronic voting. Having the ability to make contact with other hon. Members, be they Ministers or Back Benchers, is important. That is one element that I personally would like to see retained, as would most members of the Committee, but if we can improve the position by using some form of modern technology, that would benefit everyone.

Points of Order

Mr. Norman Baker: On a point of order, Madam Speaker. I apologise for rising again. In Defence questions earlier this afternoon, I asked the Minister for the Armed Forces a specific question about a report called "Assessing the Technologies of Political Control", and his answer was that he was unaware of that report. On 26 January 1998, the hon. Member for Cynon Valley (Ann Clwyd) asked whether a statement could be made on exactly that report and its application to RAF Menwith Hill. The Minister said:
I am aware of the report referred to by my hon. Friend".—[Official Report, 26 January 1998; Vol. 305, c. 33.]
Will the Minister now withdraw the comment that he was unaware of the report and arrange to give me a substantive answer?

The Minister for the Armed Forces (Dr. John Reid): Further to that point of order, Madam Speaker. I will stand corrected, but, if the hon. Member for Lewes (Mr. Baker) checks Hansard, he will find that my reply was that I would not verify a quotation from a report that I had not read—[Interruption.] We shall check Hansard. I am sure that I said, "that I have not read". [Interruption.] No: today's Hansard, which the hon. Gentleman might not know has not yet been prepared, but we can read it tomorrow. I am not in the habit of verifying quotations extracted from a document that I do not have in front of me and have not read.

Madam Speaker: I remind hon. Members that there are occasions when a Member does not necessarily approve of an answer that has been given by a Minister. That is not a point of order. If the answer is not approved of by the Member, of course, there is always the Order Paper to explore the question further. I am not responsible for the quality of answers that are given by Ministers.

Opposition Day

[10TH ALLOTTED DAY]

Trade Union Recognition

Madam Speaker: I have selected the amendment in the name of the Prime Minister.

Mr. Stephen Dorrell: I beg to move,
That this House urges the Government to define its policy on
trade union recognition; and urges it to require the support of 50 per
cent. of the total workforce, rather than 50 per cent. of those voting in ballots, to determine whether union recognition should be compulsory, given the Government's rejection of the Official Opposition's policy of leaving the law unchanged.
The motion is intentionally narrow. The Government amendment covers a wide range of important subjects, but they are not germane to the subject of trade union recognition, which is the subject that the Opposition seek to debate in the first part of our time today. The Government amendment deals with the minimum wage, the social chapter, works councils and the working time directive. Those are all essential and important issues, but they are different from the subject that we have put on the Order Paper.
The question this afternoon is simple and straightforward: should the law impose an obligation on employers to recognise trade unions, and, if so, when should that obligation arise? That is the question that the House is being invited to address. Our attitude to it is very clear.
Like the Confederation of British Industry, we are opposed to the compulsory recognition of trade unions. The provisions imposing compulsory recognition were key elements of the Employment Protection Act 1975. The Government like to argue the benefits of pilot schemes, but we conducted a pilot scheme on those proposals in the late 1970s, and it was a disaster. That is why we are opposed to reintroducing into law the principle of compulsory recognition of trade unions. We abolished such recognition in the Employment Act 1980, and that was one of the key elements in the long-term improvement in employment and industrial relations brought about during the 1980s and early 1990s.

Mr. David Winnick: rose—

Mr. Dorrell: I give way to the hon. Gentleman, always with pleasure.

Mr. Winnick: On 25 January 1984, the Tory Government banned trade unions at Government communications headquarters. Does the Opposition spokesperson now agree that trade unions should be recognised at GCHQ, a change introduced by the Labour Government within weeks of coming to office, or does he take the view that the ban was right? If so, would a future Tory Government reintroduce the ban at GCHQ?

Mr. Dorrell: Again, Labour Members are keen to raise any subject other than that which we are seeking to put before the House. The question that the House is being


asked to consider is whether the law should impose a requirement for the compulsory recognition of trade unions.

Mr. Winnick: That does not answer my question.

Mr. Dorrell: I was going to go on to say that, of course, many employers voluntarily recognise trade unions as the representatives of their workers. There is widespread use of that practice in both the public and private sectors. For the purposes of this debate, the question is not whether trade union recognition is desirable or undesirable in all circumstances or in any particular set of circumstances, but whether the law should impose a requirement to recognise trade unions in a particular set of circumstances, against the wishes of the employer. That gives rise to several consequential questions.
If one is prepared to accept the principle that recognition should be imposed against the will of one of the parties to the agreement, the question arises—it is one that is causing untold grief within the Labour party and between Labour Front Benchers and the trade unions—what are the circumstances in which the obligation to recognise trade unions should operate? What are the implications if the principle is enshrined in law?
If recognition is compulsory, how should one treat the non-union staff of an employer who is required to recognise a particular trade union? What issues are covered by a compulsory recognition agreement? We have heard nothing from the Government about that. We have been told about the principle of compulsory recognition, but the Government have not set out the implications for trade unions and employers if a recognition agreement is imposed.

Mr. Winnick: Will the right hon. Gentleman give way?

Mr. Dorrell: I shall give way to the hon. Gentleman again in a moment.
What would happen if the parties to an imposed recognition agreement failed to agree after negotiation? Would the employer still be free to act as an employer must be free to act, to defend the interests of the firm and therefore the long-term interests of the people who work in it, or do the Government intend to impose a recognition agreement that gives a power of veto to trade union bosses over decisions that affect the viability of a firm? Is that the position that the Government are adopting? They have introduced the idea of compulsory recognition, but have refused to tell not only us but the employers and others who would have to operate the agreements what the implications would be.

Mr. Denis MacShane: The right hon. Gentleman is getting terribly worked up very early in his speech. In effect, what is on the table is nothing other than a version of what has existed in the United States since 1935, wholly supported and endorsed by Republican Congresses and Republican Presidents. If the right hon. Gentleman made the same speech in America, he would be laughed out of the House.

Mr. Dorrell: That is an interesting principle, which the hon. Gentleman might like to try out on the Prime Minister—that new Labour should sub-contract policy making to the Republican party in the American Congress. I look forward to hearing how he gets on. I am not sure that he will command the support of all his right hon. and hon. Friends on that.

Mr. John Bercow: Does my right hon. Friend recall that, in June 1997, the Secretary of State for Education and Employment told reporters that the Government's White Paper on fairness at work would be published by the President of the Board of Trade by the autumn of that year? Ten months later, it has not appeared. Is that not because the Government are at war with themselves, with the modernisers on one side and the trade union lackeys and recipients of trade union sponsorship on the other?

Mr. Dorrell: As ever, my hon. Friend is one step ahead of my argument. I was about to raise that point.
Labour Members thought that they had resolved the issue and had an agreed policy that they could implement immediately after the general election. The Labour manifesto said: 
People should be free to join or not to join a trade union.
We have no difficulty with that. However, the manifesto continued:
Where they do decide to join, and where a majority of the relevant workforce vote in a ballot for the union to represent them, the union should be recognised.
The argument among Labour Members is over what those words mean—as we saw in the exchange last week between the Prime Minister and the hon. Member for Bolsover (Mr. Skinner).

Mr. Winnick: Will the right hon. Gentleman give way?

Mr. Dorrell: No, I will not, because I am dealing with the revealing exchange between the hon. Gentleman's right hon. Friend the Prime Minister and his true hon. Friend, who is sitting on the Bench below the Gangway.

Mr. MacShane: We are all friends on the Labour Benches.

Mr. Dorrell: The hon. Gentleman can convince us of many things—perhaps even that we can sub-contract policy making to the Republican party—but he will never persuade us of that.
I am glad to see the hon. Member for Bolsover in his place. At Prime Minister's questions last week, he said:
When does the Prime Minister expect to conclude the talks with the Confederation of British Industry about the vexed problem of trade union recognition rights and voting by a simple majority? Is he aware that, the way that they are going on, they will probably take longer than the Northern Ireland peace agreement?
That is an interesting parallel. The hon. Gentleman thinks that the disagreements in the Labour party are similar to those in Northern Ireland. The Prime Minister's response was revealing.

Mr. Dennis Skinner: What about the bit at the end?

Mr. Dorrell: I left that out. In the interest of peace on the Labour Benches, I am going on to give the Prime Minister's reply. He said:
In the manifesto we stated that trade union recognition would be given if a majority of the relevant work force wanted it. We said that in government we would consult and negotiate on what that meant".—[Official Report, 1 April 1998; Vol. 309, c. 1254.]
That is an extraordinary proposition. We have the Prime Minister's word that the Labour party intended to consult and negotiate on the meaning of the words in the manifesto on which it was elected.
Some Labour Members and their supporters in the trade union movement thought that they knew what the words meant. Mr. John Edmonds said:
This was very well discussed before the Government came into office. We worked out all the details. We are rather surprised that we are now a month before the White Paper is due to be published and apparently there are so many issues which haven't yet been settled.… It is a clear manifesto commitment that everybody understood.
Mr. Edmonds was in for a shock. He went on to say, more threateningly:
I think the Labour Government will understand that if it didn't deliver that there would be some very difficult consequences within the party.
We are beginning to see the disagreements that give the lie to the proposition of the hon. Member for Rotherham (Mr. MacShane) about everyone being friends.
Several other issues are at stake over this matter, in the great Labour movement. The manifesto commitment is in truth new Labour in microcosm. At the election, the British people were presented with a coalition that combined, on the same side of the argument, the hon. Member for Bolsover and Mr. Rupert Murdoch. It will not come as a surprise either to Mr. Murdoch or to the hon. Gentleman that that coalition, which defied gravity, is beginning to crumble a little at the edges.

Mr. Phil Woolas: Does not that coalition simply show just how unpopular the right hon. Gentleman's party was?

Mr. Dorrell: The hon. Gentleman will need to reflect on the fact that it shows how unairworthy the vessel on which he is flying will turn out to be. He is in the House, but how long will he stay here? As this Parliament progresses, that question will increasingly dominate his thinking and that of many of his hon. Friends.
The Prime Minister knows that the press know that the coalition that he put together, which includes the hon. Member for Bolsover and Mr. Rupert Murdoch, is, to put it no stronger, a trifle suspect. He knows that the question of trade union recognition throws the spotlight on one of new Labour's key weaknesses. That is of course why, as my hon. Friend the Member for Buckingham (Mr. Bercow) pointed out, the implementation of the pledge in the doublespeak of the manifesto has been delayed.
Mr. John Monks, of the Trades Union Congress, sought to persuade the Prime Minister immediately after the general election that the commitment was, in the words of Mr. John Edmonds, clear; everybody knew what it meant. He asked why it should not be put into the National Minimum Wage Bill. My hon. Friend the Member for Buckingham could then have talked about it all night.
Mr. Monks said that there was an opportunity to put the commitment into a piece of legislation and carry it through, as everybody knew what it meant. The Prime Minister was a little more cautious; he ordered delay. As he had got the hon. Member for Bolsover and Mr. Murdoch on the same side of the argument, he told Mr. Monks to go away and get the TUC on the same side of the argument. That was always, of course, an impossible task.
The CBI has been crystal clear on the issue. Mr. Adair Turner said:
The CBI would quite clearly prefer not to have legislation creating a statutory requirement for union recognition …We don't see the need for change and we would prefer to leave the legal framework as is.
We on the Conservative Benches whole-heartedly agree with those words.

Maria Eagle: Does the right hon. Gentleman accept that the Opposition motion exactly reflects the CBI's position? Does he recall that, when his Government proposed that all those who did not vote in ballots for industrial action should be counted as votes against, the CBI opposed that as nonsense?

Mr. Dorrell: That is another example of Labour Members being intent on talking about every subject other than the one on which they are currently disagreeing. I quite understand the hon. Lady's self-preservation instinct; it is a great deal easier to talk about issues on which they are all on the same side. The motion requires Labour Members to address an issue that is a subject of argument in the Government. The Labour party was elected without having resolved the meaning of the words in its manifesto.
Mr. Turner went on to say that, if we must have compulsory recognition, which is an undesirable state of affairs, three key issues have to be addressed. I shall touch on two of them briefly before referring to the third, which is the key and by far the most important.
First, I wish to refer to the position of those who are not members of trade unions, when there is a compulsory recognition agreement. Of those people, Mr. Turner says:
there should be a right for individuals working in units covered by collective bargaining agreements to make separate individual contracts with their employers if they so wish.
That must be right. We cannot have a compulsory recognition agreement that claims to subsume the rights of those who choose not to be a member of a trade union. The rights of non-union members are critical and must be addressed.
Secondly, I refer to small firms. Mr. Turner says:
At the small company level, entrepreneurs should simply be able to say—this is the style by which I want us to work within this company—bargaining based or not, consultative or directed in style—and to attract to that company people who are happy to work in that style.
Once again, that is a clear enunciation of an important principle.
We then move to the third and critical question. What majority is required? If we are to have compulsory recognition, what support does the trade union have to show among the work force of the particular part of the company that it claims to represent? That question—raised by the hon. Member for Bolsover with the Prime


Minister—is in danger of tearing the Labour party apart. [HON. MEMBERS: "Rubbish."] Labour Members say that is rubbish. We shall come back to that.
This is a key issue of principle. Who can claim the right to speak for, and negotiate and do deals on behalf of, a group of workers? The CBI says—and we agree—that, if we must have compulsory recognition, a trade union must be able to show the support of at least 50 per cent. of those on whose behalf it claims to speak before it can claim that right. That is a simple proposition.
The trade unions and the hon. Member for Bolsover argue, on the contrary, that, if there is a 20 per cent. vote and 10.1 per cent. of the work force vote for recognition, that 10.1 per cent. can impose their will on 89.9 per cent. of the employees of the company. That is the principle that the hon. Member for Bolsover and the trade unions stand for. The Prime Minister knows which side is right—there is no argument about which side his instincts are on. The question is whether he can carry his party with him.
This is an acid test of whether new Labour is any different from the Labour party of nearly 30 years ago. Then, it was not the President of the Board of Trade and Secretary of State for Trade and Industry who was presenting a paper, but another lady, Baroness Castle, who presented "In Place of Strife" in 1969. Is this to be "In Place of Strife, Volume 2"?

Mr. Michael Jabez Foster: I do not understand the right hon. Gentleman's view of legitimacy. Why is it somehow not legitimate for less than 50 per cent. to speak on behalf of the whole, when Governments may be elected by 43 per cent. of the vote and when directors are often elected by a very small number of the shareholders voting, yet speak on behalf of the company?

Mr. Dorrell: That is a question one dreams of being asked. The hon. Gentleman asks what difference there is between an election and the claim of a trade union to speak on behalf of a group of workers. They are completely different propositions. The claim of a trade unib on to speak on behalf of a group of workers should be based, as a minimum, on commanding the support of the majority of the group of workers on whose behalf the union claims to speak.
This is not just a matter of principle—trade union bosses understand clearly that it is a matter of straight power politics. Mr. Bill Morris understands that. As long ago as 1991, he was saying:
The unions' big problem today is not maintaining the closed shop"—
that is the old argument—
it's getting recognition. If I have to choose between a closed shop and statutory recognition, I'll choose statutory recognition.
Mr. Bill Morris sees clearly where the interests of his union as an organisation rest. That is why the trade union movement has vacated the field on the subject of the closed shop, recognising that compulsory statutory recognition is more important. That is what the argument is about, and why Mr. Morris is making it crystal clear that it is an issue on which the Transport and General Workers Union intends to stand and fight.
I can quote more up-to-date words from Mr. Morris, to reinforce that principle:
This is a defining issue for trade unionists. There is simply no room for compromise …It's a straightforward choice: either the Government supports the CBI position or the TUC position.
Mr. Morris says that it is a straightforward choice, with no room for compromise.

Mr. Tim Collins: Does my right hon. Friend agree that it was because of the importance of the issue that so many trade unions made available millions of pounds, not least in kind, through providing professional full-time agents, computers and cars in marginal seats at the general election? Now the trade unions are demanding their payback for what they did last year.

Mr. Dorrell: My hon. Friend is right, and I shall offer some reflections on that linkage in a moment. First, I must dwell on the strength of feeling attached to the principle within the trade union movement. It is not only Mr. Morris who sees how important it is from the unions' point of view. Roger Lyons, the general secretary of the Manufacturing Science and Finance Union has said that the issue could
make the split on the lone-parent benefits look like a vicars' tea party".
He understands the important issues to be decided in politics today.
Mr. John Monks has said:
If this goes …wrong …it will be a decisive moment.
Furthermore, an unnamed senior figure in the Labour party—someone with good contacts at the New Statesman, so we can draw up an acute short list of who that might be—has said:
Someone, somewhere is selling out".
Those are the words being used within the Labour party to describe the current debate about what the words in the Labour manifesto mean.
The principles are all clear enough. Labour Members have a problem. The hon. Member for Bolsover does not have one, and we heard last week what he thinks about these issues. I have brought my pager, too and I use it as often as he does—

Mr. Skinner: indicated dissent.

Mr. Dorrell: Perhaps the hon. Gentleman borrowed it. His right hon. and hon. Friends on the Labour Benches have a problem, however. They are in trouble in this debate, because they do not know which way Tony is going. They are sitting like startled rabbits caught in the headlights. They do not know which way to leap, because they have not yet heard on the pager which way the new Labour version is going.
We know which way the Prime Minister would like to go, and there is no serious secret about that—

Mr. Patrick Nicholls: Both ways.

Mr. Dorrell: Yes, both ways at once, but even for the Prime Minister, that is impossible. His instincts are clear, as we heard from the Lord Chancellor, who is always sent in to bat on an unpopular cause, to see where the bullets


are coming from. Before the election, the Lord Chancellor made it clear that the Labour party should adopt the CBI position, so that is one piece of evidence about where the Prime Minister is coming from.
The House will remember that the Minister for School Standards—another licensed Blairite and another tin hat shot up occasionally above the barricades to see what is coming—held a famous dinner party in Blackpool—

Mr. Patrick McLoughlin: It is a good place for a conference.

Mr. Dorrell: Yes, that was the last visit by the people's party to the people's resort—perhaps that is why the Labour party is not going back to Blackpool.
The Minister for School Standards speculated with a group of journalists about how a new Labour Government might provoke a crisis—[Interruption.] I see Labour Members nodding; they recognise the argument. The Minister almost salivated over his dinner at the prospect of the new Labour Government provoking a crisis in their relationship with the old Labour trade unions, giving new Labour the opportunity to break the trade union link. We know where the Prime Minister's instincts—his private, deepest thoughts—lie. Probably, he sometimes allows himself to dream what The Sun headline would be if Labour made it clear that it was dumping the trade unions and going with the CBI.
As the Prime Minister steels himself in the still watches of the night to take the decision, other voices, of which my hon. Friends have reminded us, will whisper in his ear, "Listen, Tony. Labour has an £8 million overdraft, and Unison, the TGWU and the GMB have all cut their contributions." The Prime Minister will also be reminded that the Amalgamated Engineering and Electrical Union has withheld £250,000. Sources at the union say that it wants to see the contents of "Fairness at Work" before it gives the money. That is the first cautionary note sounding in the Prime Minister's ear.

Mr. Dale Campbell-Savours: What advice would the right hon. Gentleman give to a constituent who came to his surgery on a Saturday asking about recognition? Let us suppose that the constituent said, "I'm having trouble with my employer at the local factory. We have tried negotiating, but the employer does not want to talk—we seem to have almost no rights." What would he say to that constituent, who had come to him for protection?

Mr. Dorrell: I would say, first, that he could talk to his employer and, secondly, that he did not need to be a member of a recognised trade union to talk to the employer. I would also tell him that I did not believe that his trade union had any right to speak on behalf of other employees at the firm unless it could show that it had the majority support of the other employees—that is the principle that the House is being asked to discuss.
I was listing the cautionary voices that will whisper in the Prime Minister's ear, among which, apparently, will be that of the hon. Member for Workington (Mr. Campbell-Savours), which will advocate the proposition that we return to the 1970s—that is his slogan—and compulsory recognition.

Mr. Campbell—Savours: I believe in fair play.

Mr. Dorrell: The hon. Gentleman bellows, "Fair pay." [HON. MEMBERS: "Fair play."] How can he seriously argue

for fair pay when, in the 1970s, his prescription led to high unemployment and industrial failure, and Britain was the lame duck of Europe?
Although the Prime Minister's instincts may point in one direction, he has to consider his £8 million overdraft and whether the union dues will keep coming. He must remember the opposition that the trade unions are threatening to mount if he follows his, and Mr. Murdoch's, instincts. Another senior source in the union to which the hon. Member for Workington belongs—the TGWU—said:
If the white paper turns out to be as bad as we fear, the movement will need to decide how to build opposition to it inside and outside Parliament.
The Prime Minister knows that this is the issue that can light the touch-paper to opposition in the trade union movement and on the Government Back Benches. That is why he is handling it with kid gloves.
The Prime Minister has an even more serious threat in his mind. Barely an edition of the newspapers comes out without our learning of another member of the Cabinet lining up with the hon. Member for Bolsover.

Mr. Tim Boswell: They are not here.

Mr. Dorrell: Their instinct for self-preservation is sufficiently developed to ensure that they are absent. The President of the Board of Trade has to be here only through the bad luck of our discussing a matter relating to her Department.
The Secretary of State for Education and Employment makes it clear privately, in a non-attributable way, that he is on the unions' side. Goodness knows why, but the Secretary of State for Culture, Media and Sport is on the list; perhaps he wants to safeguard his position. The Secretary of State for Health is there, presumably representing all his old friends in the London Labour party. The Secretary of State for Wales is always on such lists. The Deputy Prime Minister is keeping his head down, but his name is there.
The one the Prime Minister really has his eye on is his next-door neighbour, who is going around burnishing his links with the trade unions. Where has the Chancellor of the Exchequer been on the subject? He has been off to a great shindig with the Transport and General Workers Union, at its 75th anniversary party, no less.
The brother in arms of new Labour said:
If the trade union movement didn't exist today, it would have to be created.
He certainly did not get that off the No. 10 pager. The Chancellor continued:
Let us remember that the trade union movement was born against the odds, it grew against the odds, it developed its strength against the odds and it will succeed against all odds.
The Chancellor praised the Transport and General Workers Union's former leader, Mr. Jack Jones; not too many new Labour spokesmen volunteer support for him. Perhaps most tellingly of all, he let slip the thought that he was "on their side". He is busy building his position.
One need not know much Labour party history to have a strong sense of deja vu. In 1969, Barbara Castle knew what had to be done, and the Prime Minister, Harold Wilson, was right behind her. It was always dangerous to be out in front of Harold Wilson. The Chancellor of the


day was busy burnishing his contacts with the trade unions, and Harold Wilson performed the manoeuvre for which he is best remembered: the strategic scuttle.
Nearly 30 years on, the Prime Minister faces the same test: will he face down today's trade union bosses and make a principled stand, or is he in reality Harold Wilson mark 2? To govern is to choose, and the Prime Minister has now to choose.

The Minister of State, Department of Trade and Industry (Mr. Ian McCartney): I beg to move, To leave out from "House" to the end of the Question, and to add instead thereof:
congratulates the Government for acting quickly and effectively to redress the damaging culture of low pay, job insecurity and the sweatshop economy inherited from the previous Government by adopting a partnership approach to set decent minimum standards for all workers; notes that good standards at work are essential for competitiveness and business success and that the Government has, as part of its strategy for ensuring decent minimum standards and labour market flexibility, involved employers' and workers' representatives on the Low Pay Commission and in discussions on trade union recognition, and in addition has restored union rights at GCHQ, signed the European Social Chapter and made rapid progress on the National Minimum Wage Bill; and further notes that the Government is also committed, as part of that strategy, which enjoys wide support, to implementing the Directives on Working Time, Young Workers, European Works Councils and Part-Time Work, and to fulfilling the Government's commitment to enable workers to enjoy union recognition where a majority of the relevant workforce vote in a ballot for the union to represent them.
That was a tour de force on the only subject that ever unites the Tory rabble: a fundamental attack on employment rights in the workplace.
The right hon. Member for Charnwood (Mr. Dorrell) even had the cheek and temerity to complain within 30 seconds that the Government had tabled an amendment to prompt discussion on other issues relating to employment rights, such as the minimum wage, the working time directive, part-time rights and insecurity. He was a member of a Government who created complete insecurity for the work force and undermined workers through low pay. They supported only those employers who wanted to implement poor employment practice, and undermined those who wanted to apply good employment practice.
We have witnessed the right hon. Gentleman's desperate last attempt to stay in the shadow Cabinet. I noticed at the weekend, under the headline, "Barbie's Hero", that he is for the chop in the next reshuffle and is described as the burnt-out education spokesperson. After that speech, I think that we have a burnt-out shadow Cabinet and a burnt-out Opposition who have learnt nothing from their defeat last May.
I am glad that the right hon. Member for Wokingham (Mr. Redwood) is here. He went on unofficial strike against his own Cabinet; he walked out on his Prime Minister. The Prime Minister decided to look for recognition and went for a recognition ballot. The right hon. Member for Wokingham lost it and went around

Britain with his Euro-sceptics as flying pickets against every Conservative who stood at the last general election. He is an expert on poor industrial relations in his party.

Mr. Bercow: Will the Minister give way?

Mr. McCartney: The hon. Gentleman wants to calm down. He has a long evening ahead of him. I am sure that he will have an opportunity to contribute at some stage.
The right hon. Member for Charnwood raised the question of Labour and trade union funding. What a cheek from a party which refuses to give back the money stolen by Asil Nadir. What about the Greek millionaires found guilty of corruption in their country? Did the Tories give that money back? The answer is no. To top it all, they took money from Hong Kong drug barons and still refuse to pay it back. The Labour party needs no lessons from Conservatives about the openness of its funding.
I am surprised that the right hon. Member chose this subject. Trade union recognition is part of the broader question of the way in which people are treated at work. It is part of partnership at work, part of a fairness culture. It is about whether people at work should have fundamental and democratically exercised rights in the workplace.
Over the past few years, we have seen all too clearly that the Conservatives are against decent, fair treatment of workers and the exercise of fundamental, democratic rights. They are against fair pay and against people having the protection of a union if they want it. They also campaigned against minimum standards that workers throughout the rest of Europe enjoy as a matter of course. They are against so much that one might think that they were not in favour of anything.

Mr. Winnick: Is it not interesting that, when I asked the Opposition spokesperson whether the Conservatives remained committed to a ban on trade union membership at GCHQ, he refused to give an answer? Was not the banning of the trade unions there disgraceful? Is it not good that, within weeks of the election of a Labour Government, we carried out our promise and lifted that bad ban?

Mr. McCartney: My hon. Friend is right. As the Conservative Government left Downing street, trade unions were allowed back into GCHQ. I am proud of that decision.

Mr. Andrew Lansley: In the light of the Minister's apparent condemnation of Conservative industrial relations policies since 1979, will he say which of the six major Acts passed since then he proposes to reverse?

Mr. McCartney: The hon. Gentleman displays something else: always living in the past. The set of proposals that this Government will introduce is about workers living in the present, about dealing with the fact that the previous Government left us in an horrendous position of low pay, insecurity in the workplace and individuals being sacked at the whim of employers. We intend to deal with that in no uncertain terms.
The right hon. Member for Charnwood also suggested that the Opposition may change their view on some policy areas. I shall deal with that later. The truth is that the


Conservative Government wanted to deliver a sweatshop economy for Britain. The Tories always supported bad employers against good employers. They drove down pay and conditions and so undercut good employment practice. Their Government was always on the side of poor employment practice. Never once did they stand up for decent employment standards, employment rights or, in a market position, for good employers investing in their employees, in education, training and good employment standards.
The Conservative Government always undercut the good employer by supporting the Arthur Daleys of this world. They even abolished wages councils, which provided a minimum of protection against the exploitation of some of our most vulnerable workers. They indulged in a frenzy of privatisation and compulsive competitive tendering, as a result of which thousands of workers lost their job or had their pay cut and their hours increased.
The Conservatives did all that in the name of deregulation, claiming that those measures were necessary to give employers the opportunity to create jobs, but they presided over the highest level of unemployment since the 1920s. Even on their own fiddled figures, unemployment rose to more than 3 million. I remember a Prime Minister saying that that was
a price well worth paying.
At the general election, the voters did not think so, and elected a Labour Government to make a difference for millions of people in the workplace. I am astonished that a party with such an appalling record should seek to draw attention to that record, by contrasting it with the positive, fair and even-handed action of the Labour Government.

Mr. Gerry Sutcliffe: Is it not true that the previous Government never called the Confederation of British Industry and the Trades Union Congress together to discuss employment rights? Does my hon. Friend remember the speech by Baroness Thatcher, in which she declared that trade unions were the enemy within?

Mr. McCartney: The whole raison d'etre of the Conservative party is opposition to partnership in the workplace. Other than the schoolboy politics it contained, the whole basis of the speech by the right hon. Member for Charnwood was opposition to partnership, for the sake of opposition. At no stage have the Conservatives committed themselves to the principle of partnership in the workplace; they believe solely in the principle of hire and fire—the employer's capacity to do anything whatever to the employee in the workplace. That is something the British people rejected by voting against the insecurity and fear of exploitation ushered in by the previous Government's policies. We are going to make a difference.

Mr. Andrew Robathan: The hon. Gentleman is talking about history again, but does he remember the winter of 1978-79? I know that he is very young, but does he remember that winter of discontent? Was that the sort of partnership between employers, employees and Government of which he speaks?

Mr. McCartney: I thank the hon. Gentleman for saying that I am very young—as the youngest grandfather in the House of Commons, I take his remark as a great compliment. However, the hon. Gentleman has again proved my point—the Conservatives live in the past, three decades ago; they take no account of the changes that have taken place in the workplace.
The Labour Government were elected, in large measure, to put an end to unfair and shabby treatment of working people. We have already taken great strides towards restoring a fair balance to the world of work. We have a clear, detailed and popular strategy for promoting fairness at work; we have a strategy for promoting partnership and mutual trust; we have a strategy for raising competitiveness by ensuring that workers are well motivated and productive. Ours is an inclusive policy: we want those who want work to be able to get work. The challenge in the workplace is ensuring that Britain is a more competitive and fairer place in which to live and work.
In part, that is a matter of establishing a fair balance: to have a framework of law that guarantees decent minimum standards, while maintaining necessary labour market flexibility. We need the force of the law to deal with the worst employers—those who pay poverty wages, who force their employees to work excessive hours and who make their workers clock off when business is slack and clock back on when it picks up. Those unscrupulous employers not only mistreat their employees but undermine their competitors who are trying to provide decent terms and conditions. We need tough laws to deal with cowboy employers. We need to protect employees and good employers from unfair competition.

Mr. Andrew Dismore: As we have already heard one or two blasts from the past, would it surprise my hon. Friend to learn that the infamous anti-trade unionist George Ward is chairman of Hendon Conservative association? He has not lost his anti-democratic principles, and that association has, recently been suspended from the national association, on the ground that Mr. Ward, among others, has been trying to infiltrate the Conservative association with his friends and relatives and employees of Grunwick?

Mr. McCartney: That is another sorry example of infiltration into the Tory party. We have seen Asil Nadir, Greek shipping magnates and drug barons do it, and the tragedy is that the Conservatives take no steps against that sort of thing. Consequently, the British public have largely rejected the Conservative party wherever it still tries to exist.
The truth is that we need to go beyond the law, and change the climate in our workplaces from one of confrontation to one of partnership. Employers and workers have many common interests. They both need their organisations to succeed, to generate profits and well-paid jobs. Employers need a skilled, motivated work force. Workers want interesting, secure jobs where their talents are properly used and their contribution respected. That already happens in the best workplaces, but in too


many there is no mutual trust. The values of greed and lack of respect for workers' dignity, preached by the previous Government, are still far too prevalent.

Mr. Collins: While the hon. Gentleman is on the subject of unfairness at work and bad employers, will he tell us who was right at Wapping: Rupert Murdoch or the print unions?

Mr. McCartney: That is another pathetic question. This Government were elected on the principle of establishing recognition in the workplace. The discussions that are taking place are about how, not whether, that will operate.
The Government are setting themselves the long-term task of improving the climate at work, building trust and partnership. It is not just about union recognition, although that is an important and familiar form of partnership in the British industrial tradition. It is about rights and respect, and about involvement in lifelong learning for every worker, including the two thirds who are not union members.
The White Paper on fairness at work, which we shall publish in the first part of this year, will set out our policy on building partnership and how we intend to pursue it. All the employment measures that we have taken and will take are based on a partnership approach, which is the best way to improve competitiveness.
A few organisations have long treated employees as partners and equals. A few, but far too few, have share option schemes for all employees, not just for directors. There are encouraging signs that more firms are moving in the right direction. For example, proposals were recently announced for a partnership between Tesco and the Union of Shop, Distributive and Allied Workers, which will give employees better representation through the union, new consultation structures and improved communications.
Another example is the partnership-based approach adopted by Transco, part of the former British Gas. Its approach is to "open the books" to all employees so that they know exactly where the company's financial resources are invested. It is also involving the unions in a partnership council for business improvement. There have been many other examples in the first year of this Government. Employers are looking at a new culture of partnership in the workplace.
Yesterday, I was pleased to see reports of an agreement between the Alfred Marks employment agency and the Communication Workers Union, which will mean that thousands of temporary workers at BT will at last be covered by the union for negotiating purposes.

Mr. Lansley: I am grateful to the Minister for giving way twice to me. He says that the debate is not just about union recognition, but his speech so far is about anything but union recognition. Will he now tell us whether he supports the CBI or the TUC position?

Mr. McCartney: That is another silly question. The Government have made it absolutely clear that, in the first part of this year, we shall publish a White Paper that will include matters surrounding union recognition. Following

the White Paper and consultation, we shall introduce a legislative programme. I do not intend to negotiate with the hon. Gentleman, who is totally opposed to recognition in the workplace.

Mr. Dorrell: If the Minister will not answer the question asked by my hon. Friend the Member for South Cambridgeshire (Mr. Lansley), will he at least, as it is the subject for debate, suggest to the House some of the considerations that others should take into account in seeking to answer that question?

Mr. McCartney: The question will be answered when the White Paper is published, in view of the consultation that will be carried out. This is the first Government in 18 years who have opened up any consultation and dialogue with employers about partnership in the workplace. Perhaps the right hon. Gentleman, who is also an employer, will say whether the companies of which he is a director recognise trade unions. I note that he is not coming to the Dispatch Box, so the answer would appear to be that he does not recognise trade unions.
As a first and vital step, the Government have begun a dialogue with employers' and workers' organisations, seeking their views and involving them in the formulation of policy. Within 90 days of the election, we set up the independent Low Pay Commission to advise us on the level of a national minimum wage. The commission includes representatives of employers and workers, as well as independent members. It has carried out the most extensive consultation on low pay with employers and employees ever seen in this country.
We then invited the Confederation of British Industry and the Trades Union Congress to hold discussions on the subject of today's debate—trade union recognition. They did so, and published a joint statement showing considerable and welcome agreement. They agreed that priority should be given to voluntary agreements, with the law as the last resort. They agreed that the Advisory, Conciliation and Arbitration Service should have an opportunity to conciliate before the statute procedure is invoked. They agreed that there should be a procedure for derecognition. They agreed that, once an application for recognition or derecognition has been decided, there should be no new application for at least three years. They agreed that unions should be able to make joint applications. They agreed on how the ballot should be organised and conducted, though not on what majority should be required. They agreed that non-union channels of representation can continue alongside recognition.
I could go on listing the areas of full and partial agreement. Suffice it to say that there is already more about which the CBI and TUC agree than disagree. They have continued talking to us, and I hope that they can find yet more agreement.
Involving social partners is a completely different approach. The previous Government shunned trade unions, despite the fact that they represent millions of workers—still a third of the work force, despite the efforts of the previous Government to drive down trade union membership. At times, it seemed as though the previous Government shunned employers' organisations, too. It was no surprise when, in November 1996, the then Government's proposals for yet further restrictions on trade union activities were heavily criticised by, among others, the CBI and the Institute of Directors.
In contrast, we see employers and unions as our allies. We are working with them, involving them in all our policies that affect the workplace. We showed the way in the first few days after the election, by ending the ban on trade unions at GCHQ, restoring the basic right of workers to join a union of their choice—something the previous Government obstinately refused to do, despite national and international criticism.

Mr. Roger Stott: As I understand it, the Government do not intend to change legislation with regard to balloting trade unions on industrial action, or to change the law on secondary picketing, and they do not intend to change other industrial legislation that was passed by the previous Government. All we are saying is that it is a requirement of our Government to give people in the workplace the legal right to join a trade union.
Is my hon. Friend aware that giving people the right to join a trade union is not simply giving them the right to take industrial action? It is also to give them the collective protection that the trade union offers people in the workplace.

Mr. McCartney: I think that we are giving more than that. We want to ensure that people in the workplace have the opportunity to exercise their statutory rights, whether or not they are in a trade union. The Government's whole approach is to give people in the workplace standards and minimum rights, whether they are part time or full time, and we shall continue to do so in conjunction and in co-operation with employers and trade unions. Where trade unions are in the workplace and employees want to be represented by them, that should also be a right. That is why the Government have put forward their proposals, which were accepted at the general election.
Involving social partners is a completely different approach. During the general election, Conservatives continued their opposition to partnership in the workplace, but we as a party are prepared not only to reject that proposal but to support, in intellectual and practical terms, various measures to promote partnership in the workplace. We introduced the National Minimum Wage Bill to put an end to poverty pay and to curb cowboy employers who drive down standards and undercut decent employers. The Tories failed in an attempt to filibuster in Committee and on the Floor of the House, and the Bill has now completed its stages in the House and gone to another place.
Perhaps the right hon. Member for Charnwood would like to tell us, and the working people of this country, what he and his hon. Friends would do in the unlikely event that they were ever again on the Government Benches? Would they repeal the national minimum wage and allow wages to fall to the levels that we now see, with security guards and hairdressers earning £2 an hour or less? Does he support his leader, who has clearly suggested that, at the next election, the Tories will not oppose a national minimum wage. Is that correct?

Mr. Boswell: When the Minister asks us, as he has in the past, about our attitude to the national minimum wage—and, indeed, to the specific issue that we are

discussing—would it not be helpful, in the light of our motion, if he told us what the Government's proposals are? That is what we are about today.

Mr. McCartney: I have been setting out the Government's position on partnership and on minimum standards in the workplace since the beginning of my speech.
It is clear that the right hon. Member for Charnwood will not follow his leader, who, not a week ago, told The Observer that, at the next election, the Conservatives would consider not opposing the national minimum wage. We now see a further split in the Conservative party. It is clear that "Vote Tory in the next election" means "Vote for wage cuts".
We are about to implement the working time and young workers directives. The previous Government, of whom the right hon. Member for Charnwood was a member, wasted more than half a million pounds of taxpayers' money on a futile legal challenge to the working time directive. That directive will give workers seven new rights. It will give them the right not to work for more than 48 hours a week. Will the right hon. Gentleman tell us whether he still opposes that proposal? Will the Conservatives oppose it?
The directive will give more than 2.5 million workers the right—for the first time—to three weeks' paid annual leave, rising to four weeks in 1999. Will the Conservative party still oppose people's right to paid holidays? Will the right hon. Gentleman confirm that the Conservatives still oppose that proposal, or will they drop their opposition? Will the right hon. Gentleman tell us what his party's position is? The answer seems to be no.
The directive will give workers a rest period when they work for six or more hours a day. The Tories oppose that entitlement, regardless of how long people work. Will they now drop their opposition, and support the Government? I give the right hon. Gentleman an opportunity to speak. Will he do so? The answer is no.
The directive will give workers a right to minimum daily and weekly rest periods. The Conservative party is against giving people one day off a week. Will the right hon. Gentleman tell us now whether the Conservatives have dropped their opposition to that proposal, or continue to oppose the principle of giving people equal status in terms of days off during the working week? The right hon. Gentleman still does not want to answer.
When he was Secretary of State for Health, the right hon. Gentleman opposed regular health checks for night workers, and special protection for young workers. Will he now tell us whether he has dropped his opposition to those proposals? The answer is that he has not even concerned himself with whether those rights should continue.
The truth is that the right hon. Gentleman does not want to have a debate about improving standards in the workplace for millions of British workers. That is because, as an employer, he is implacably opposed to good employment practice—unlike tens of thousands, indeed hundreds of thousands, of employers in Britain who want fair and decent standards, and support the Labour Government's proposals. The right hon. Gentleman is still indicating that the Conservatives oppose minimum standards in the workplace.

Mr. Collins: As the Minister is on the subject of the working time directive and questions about it, will he tell


us whether the Government are in favour of reducing the maximum working week to 40 hours, as is now being proposed in Europe? If they are against that reduction, how—now that they have given way on qualified majority voting—do they propose to stop it?

Mr. McCartney: Again, the hon. Gentleman shows a distinct lack of knowledge of the subject. The Government are introducing the 48-hour week by implementing the working time directive. Consultations are currently taking place about excluded sectors—the eight European employment areas that are excluded from the directive at present. We will consult on that, and, at an appropriate time, Europe will reach a decision that we will support in principle. [Interruption.] We support the principle of decent minimum standards for all workers. Why are the Tories so opposed to that?
The right hon. Member for Charnwood and the hon. Member for Daventry (Mr. Boswell) have shown their lack of interest in the promotion of decent standards in the workplace. They have tried to have a schoolboy debate. They have tried to suggest, rather fatuously, that there is some disagreement between the Labour party and industry over the concept and the principle of introducing trade union recognition.
All those measures are part of the broader strategy that I have described for competitiveness through partnership, decent standards and labour market flexibility. So is trade union recognition. As I have said, we asked the CBI and the TUC to try to narrow their differences. They did so, and produced a joint statement. We have continued to have discussions with them, and have achieved a great deal of agreement. Unlike the right hon. Member for Charnwood, I want to congratulate the CBI and the TUC on the spirit of co-operation with which they have approached the issue, to achieve a constructive way forward and to ensure that the White Paper will meet the needs of everyone in the workplace to secure agreement over recognition and representation.

Mr. MacShane: Surely the whole House should congratulate the CBI and the TUC, especially on their agreement not to go for penal clauses, for fines or for sequestration, which was the vindictive approach of the Conservative party when it was in power. As I understand it, the White Paper will aim for partnership and agreement, not for the use of the heavy hand of the law to victimise one side of industry, as Governments have done in the past.

Mr. McCartney: My hon. Friend is absolutely right. The purpose of the White Paper is to encourage and promote partnership in the workplace. The world has moved on since 1975: the structure of industry and employment in this country has changed profoundly; the number of trade unions has dropped from 484 in 1976 to 255 in 1996 due to amalgamations; and trade union membership has dropped from a peak of 13 million in 1979 to just under 8 million in 1996.
The trade union movement has responded to those and other developments by changing and modernising. Trade unions are now committed to working with management for their mutual benefit, which is why 88 per cent. of the

FTSE top companies already recognise unions voluntarily, and why inward investors such as Toyota and Nissan have willingly recognised trade unions.
We have encouraged the CBI and the TUC to pursue their discussions with the Government. The discussions are making good progress: it would be unrealistic to expect social partners to agree on everything, but I am confident that they will agree on a great deal and will help the Government to put forward balanced, practical proposals.
The proposals will provide a rational, agreed way of resolving disputes. At present, employers are free to ride roughshod over the wishes of their work force. Employers have derecognised or refused to recognise unions against the wishes of an overwhelming majority of the work force, and continue to do so. I do not want to name names or to take sides in disputes that are under way, but that cannot be right—there must be a better way of resolving such disputes than goading trade unions into taking industrial action.
In future, the vast majority of recognition claims will be settled by negotiation between the parties. Our proposals will be designed to encourage voluntary settlements at every stage—legislation will apply only as a last resort, when the parties have reached an impasse despite the good offices of ACAS.
I shall not be drawn on the details of our proposals; I must ask hon. Members to be patient for a little longer. We shall publish the White Paper as soon as we can. I assure them that it will be worth the wait, and all the better for the effort that we have put into building a consensus between the social partners. It will be a consultative document, but, as we said in our manifesto, we shall consult on how to implement the recognition agreement, not on whether to do it. Afterwards, we shall move to legislate as quickly as possible.
The Government are moving quickly and decisively to restore a fair balance of rights and duties in the workplace, to promote partnership and to ensure decent minimum standards. We are well on the way to achieving a national minimum wage, to guaranteed minimum paid holidays, to reasonable rest breaks and an end to unreasonably and harmfully long hours, to equal rights for part-time workers and to a right to reasonable time off for parents, including adoptive parents.
The White Paper will set out our proposals for the last substantial brick in that edifice—a framework of decent employment law for the 21st century. I urge the House to support the Government amendment.

Mr. Peter Bottomley: In the first half of his speech, the Minister spoke about what Conservative Members did in government; in the second half, he spoke about what we would do when we got back to government, but he did not appear to have read the first line of the motion.
People rightly criticise the Government for treating the House of Commons with contempt. If he were listening to me instead of consulting hon. Members on the Bench behind him, the Minister might hear the words to which he should have addressed his speech. I should be most grateful if I had his attention. The motion states that the Government should
define its policy on trade union recognition".
The Minister did not do that: he talked about the White Paper and said that Conservative Members had asked a silly question; he then talked about how he wanted to achieve consensus—but he is stuck with his own words about a silly question being asked.
There are choices to be made about the threshold for union recognition. The Conservative motion makes it clear that the Government have rejected the Opposition's policy. The Confederation of British Industry accepts that the Government's policy will be implemented. Before the Government make a decision, they should spell out their own view, but they have not done so. My right hon. Friend the Member for Charnwood (Mr. Dorrell) quoted the exchange between the hon. Member for Bolsover (Mr. Skinner) and the Prime Minister—the "Skinner is innocent, okay" question. The Prime Minister would not give an answer.
Similarly, Government supporters have to look at their bleepers to discover what they are supposed to be thinking. Shortly after the general election, the Conservative Leader of the Opposition asked the Labour Prime Minister whether he intended to introduce prescription charges for pensioners. As expected, the Prime Minister kicked that issue into this year.
What was surprising was that 200 Labour Back Benchers did not shake or nod their heads; they did not even turn their heads in circles. Before the election, they would have made their views known if they had suspected that the Conservatives wanted to introduce prescription charges for pensioners, but now they wait until they feel a tremble in their midriff to see whether they are told to talk to each other, to put a question or to distract attention from the key point.
If any Labour Member present can tell me whether they are in favour of prescription charges for pensioners, will they intervene? Or, to put it a different way, does any Labour Member believe that the Minister of State wants the threshold for union recognition to be a majority of the work force or a majority of those who vote? I shall give way to any Labour Member who can tell me what he or she thinks is in the Minister of State's mind, having listened to half an hour of his speech. [HON. MEMBERS: "Come on."] Not one Labour Member is willing to intervene.

Mr. Ian McCartney: rose

Mr. Bottomley: I shall give way to the Minister of State if he will answer my question. He presumably knew what he was saying during that half hour.

Mr. Deputy Speaker (Mr. Michael J. Martin): Order. The hon. Gentleman must either give way or not give way. He cannot put conditions on it.

Mr. Bottomley: I shall give way.

Mr. McCartney: It is very nice of the hon. Gentleman to give way. If Conservative Members were serious, they would have had this debate following publication of the White Paper. The Government made it absolutely clear from the outset—it has never been any clearer—that we will publish a White Paper for consultation. Conservative Members chose to have this debate purely for party political reasons. We will not allow party politics to

interfere with good employment relations. I will debate this issue with the hon. Gentleman on any platform after the publication of the White Paper.

Mr. Bottomley: So now we know. The issue that the Minister described as a "silly question" is the subject of disagreement between the CBI and the Trade Union Congress. The Minister says that we should not debate this matter until the details of the Government's policy are published. All I did was ask whether there is a Labour Member present who has an idea of the Minister's view. The TUC and the CBI have a view, and their views have been mentioned. The Minister of State, speaking for the Government, is the only person who does not have a view, or will not tell the House of Commons what it is.
Of course we shall wait for the White Paper, and we shall have a debate on it when it is published. Today's debate is to ask the Government to define their own view. I do not believe that they do not have a view.

Mr. Boswell: They have two, actually.

Mr. Bottomley: Yes, they have two, as my hon. Friend says.

Mr. Stott: Will the hon. Gentleman give way?

Mr. Bottomley: I know that I cannot set conditions, but I live in hope that the hon. Gentleman will tell me what he thinks is in the Minister's mind.

Mr. Stott: For years, the hon. Gentleman has worn a Transport and General Workers Union tie. He has been proclaiming his membership of that union ever since he came to the House. If a group of people in a workplace wanted to join the TGWU but were prevented from doing so, what would he do about it?

Mr. Bottomley: I am not sure whether the hon. Gentleman is fully on song. In his earlier intervention, he misunderstood the issue, and he now asks what I would do if someone wanted to join the union. I would welcome them, because I believe in trade union membership. Nothing in the law of this land prevents people from joining a trade union if they so want.
I was elected in 1975, shortly before the hon. Member for Workington (Mr. Campbell-Savours) failed to get elected in a by-election because of the effect of trade union action. At that time, some people were not allowed to join the union of their choice because a Labour majority in the House had forced through legislation that allowed people to be sacked if they were not in the union that Parliament had determined they should join.

Mr. Robathan: It was not a matter of whether people wanted to join a union: they had to join a union to get a job. Is that morally defensible?

Mr. Bottomley: No one defends that practice now. The Minister said that that issue would not be raised. Likewise, the Government have said that they do not intend to overturn the other six employment laws passed by the Conservative Government. We should regard that as progress.
Some of my right hon. and hon. Friends have plenty to learn about trade unions. Not many Conservative or some Labour Members understand what was required to establish trade unions in the first place. Some hon. Members came to a meeting in the Jubilee Room to discuss Alexander Bowman, otherwise known as the "people's champion", who helped to set up trade unions in Belfast just over 100 years ago. His biography has been written by his great-grandson Terence Bowman. Hon. Members should also learn about people such as Will Crooks, who represented Woolwich, which I also represented.
Many hon. Members do not understand what went into the organisation of people at work in the face of apathy, ignorance and sometimes violent opposition. Many of them do not understand some of the inter-union rivalries, and do not realise how much voluntary time people put into representing their colleagues at work, not just over pay and conditions or health and safety, but in trying to combat prejudice.
Employers may want to take on black car delivery workers, but the predominant group in that trade and in that part of the union say that it must be a whites-only job. Such problems require persistence, courage, sacrifice and service. [Interruption.] The hon. Member for Brentford and Isleworth (Ann Keen) shakes her head, so I assume that she disagrees with me.
The last time I raised a union issue was when I asked the Prime Minister whether he regretted trying to support the challenger to Bill Morris's re-election as general secretary of the TGWU. The Prime Minister told me that I was wrong, and that he had not supported the challenger. I tabled an early-day motion listing the facts chapter and verse—I did not go into what I had heard at Transport house. He has not said that I was wrong.

Ann Keen: The hon. Gentleman referred to me shaking my head. Along with my hon. Friends, I am shaking my head in total disbelief that the hon. Gentleman feels he has to lecture us about the rights of people at work and the difficulties they face fighting for those rights. Labour Members know perfectly well why people have such problems.

Mr. Bottomley: I did not know that I was lecturing: I was trying to share a common understanding of the background to the better side of trade unions. If Labour Members read the earlier part of my speech, they will understand what I mean.
The Government are trying to duck their responsibility. The Minister spoke about a partnership. What will be the majority threshold if union recognition is to be granted by law? Union recognition is not being granted by agreement with the employer. I said that I believe in unions, and I also believe in union recognition, but we must decide on the threshold.
One of the problems with the new, modern, model Labour party is that it does not understand what has been going on in the recent past. Reference has been made to trade union recognition at GCHQ in Cheltenham. The unions were recognised at GCHQ before the election; the difference was that national unions were not going to be recognised. [Laughter.]
Labour Members laugh. In the mid-1980s, we could have asked any Government in NATO—Governments such as those in France, Germany or Italy—"Can your people involved in this sort of work be members of a trade union, and, if so, could they be ordered to strike by their national leadership?" The reply would have been that the question was incomprehensible. First, most of the work that is the equivalent of the work carried out in Cheltenham is done by the services. Secondly, even the most left-wing trade union leaders in other parts of western Europe would not have dreamed of calling for, let alone tolerating, a strike by people in signals intelligence. It is worth remembering those points, and they are worth repeating.
Let us look at the key part of the motion rather than at the Government's amendment, which concludes by referring to the
majority of the relevant workforce".
That is the dilemma on which the Government are hooked. Our motion asks who will be able to join in the discussions. None of the Labour Members who are in the Chamber will be present, because they do not know what is in the Government's mind and do not know whether they are supposed to agree with what the Government will present.
The White Paper must be difficult to write. In the past, in responding to a serious issue—not a silly question, as the Minister put it—most Ministers would say, "We know the choices." The Minister of State did not even do that. He uttered not a single sentence about the key issue in this debate. That is not because he does not know the issues: he knows them perfectly well.
Why did the Minister not address the issues? It is not just because of union influence in the Labour party, although that is part of it, and it is not just because of the threat of losing money, although that may be part of it as well. It is because the Government do not know how to make the decision, and I do not think that they yet know what decision they want to make. That is why the debate is worth while.
Despite some merits, the Government are full of PR presentation, puff and aggression, and they occasionally raise their voices to above 85 dB. They ought to ask themselves why they have a problem on the issue. The answer is that they do not yet know whom they will offend. My guess is that they will finally come down against the trade union view, and that the unions will accept it. The uncertainty is rather like a Labour Back Bencher standing by the door of the Division Lobby and saying, "I do not want to support you," and the Whip reaching out and pulling him in.
I do not envy the Government their dilemma. They have caused it for themselves, and they should be big enough to talk openly about it in advance of the White Paper. The Minister's words, "It is a silly question," will be tied around his neck as long as the legislation is before the House.

Mr. Deputy Speaker: I call Mr. Gerry Sutcliffe.

Mr. MacShane: On a point of order, Mr. Deputy Speaker. On page 421 of "Erskine May", under the heading "Declaration of interest in debate", it is made quite clear that an hon. Member should declare any direct or indirect interest at the beginning of a debate,


particularly if it is recorded in the Register of Members' Interests. May we have a general ruling for the conduct of the rest of the debate, so that, if a right hon. or hon. Member has a direct interest through being a director of a company that does not recognise unions and which stands to gain financial benefit one way or the other from the passing of legislation, he should declare that interest?

Mr. Collins: Further to that point of order, Mr. Deputy Speaker.

Mr. Deputy Speaker: I shall deal first with the original point of order.
First, how Members declare their interests is entirely a matter for them. Secondly, any complaint should be addressed to the Parliamentary Commissioner for Standards, not to the Chair, because such matters are not for the Chair.

Mr. Collins: I was merely going to ask you, Mr. Deputy Speaker, to make it clear in your ruling that the same would apply to any hon. Member who is sponsored by a trade union, because he would equally have a clear interest in the matter.

Mr. Deputy Speaker: There is a code of conduct, and every hon. Member knows how to conduct himself in the House.

Mr. MacShane: Further to my point of order, Mr. Deputy Speaker. In the light of Madam Speaker's ruling before Christmas in respect of the former Department of Trade and Industry's deputy shadow spokesman on a related matter, can you rule whether the right hon. Member for Charnwood (Mr. Dorrell), who has remunerated directorships in an industrial clothing manufacturer, one Faithful Ltd., which does not recognise trade unions, would have been better advised—I put it no stronger than that—to declare or refer to that interest when he opened the debate?

Mr. Deputy Speaker: As I have said, that is not a matter for the Chair. How each Member conducts himself in such matters is entirely a matter for him. The right hon. Member was in order, and that is all that I need to concern myself about.

Mr. Gerry Sutcliffe: I shall start by declaring an interest. I am a member of the Graphical, Paper and Media union, and secretary of its parliamentary group. I can tell the hon. Member for Westmorland and Lonsdale (Mr. Collins) that no Labour Members are sponsored.
We know why the Opposition have called the debate. It has nothing to do with serious involvement in trying to develop an appropriate framework for fairness at work. It has more to do with posturing, mischief making and union bashing, which is what the previous Government did for 18 years. The least we could have expected was an apology for the vindictive policies of those 18 years, which destroyed workers' rights and jobs, and left Britain with the worst employment laws in the western world. It was disgraceful of Baroness Thatcher to describe

hard-working people in trade unions as "the enemy within". In this debate, Conservative Members have done that again.
One of the major reasons for the Tories losing the election in May was their complete disregard for workers' rights. They reduced the safeguards for working conditions, removed protection, and allowed the exploitation of women and young workers. They cut wages councils and created an environment in which bad employers were encouraged. The new Labour Government are starting to redress the balance, which went unchecked for 18 years.
The Government have started to implement Labour's manifesto commitments. Union rights have been restored at GCHQ, check-off has been abolished, the European social chapter has been signed, a national minimum wage has been introduced, and there have been improvements in the conditions for casual and agency workers. Those commitments were not based on political dogma: they were taken on because they were right.
The Government are committed to work and the work ethic. They are restoring opportunities through programmes such as the new deal, assisting and developing regeneration schemes, and working with social partners to generate job opportunities. Those are key parts in the rebuilding of Britain, which is vital to everyone. Work is undoubtedly vital, and it follows that fairness at work is equally important. The notion of consensus in the workplace is clearly the best way to achieve success, and the Government deserve credit for bringing together the Trades Union Congress and the Confederation of British Industry. The voluntary arrangements they have agreed are welcome.
As the Minister of State knows, our manifesto commitment to trade union recognition was the result of detailed consultation. We rightly said that people should be free to choose whether to join a trade union. When they decide to join, and when a majority in the relevant work force vote for a union to represent them, that union should be recognised.

Mr. Robathan: The hon. Gentleman is on the crux of the matter. Will he define "the majority" and "the relevant work force", because that is what the motion is about?

Mr. Sutcliffe: If the hon. Gentleman cares to wait, he will hear me speak about that.

Mr. Robathan: Will the hon. Gentleman explain the matter?

Mr. Sutcliffe: I shall do that later in my speech.
We said that such a course would promote stable and orderly industrial relations. We were clear about what that meant then, and we are clear on it now. After the election, the Prime Minister asked the CBI and the TUC to meet to narrow the gap. I understand that there have been a number of meetings recently between Ministers and both organisations. That is right, to ensure that the policy is correct. Recognition is vital if unions are to be allowed to do their jobs properly and effectively. All the Government's positive actions so far on employment will be devalued if we do not get the matter right. It is not a question of the TUC winning or the CBI losing: it is a question of what is fair and will work.
An NOP poll in August showed that 77 per cent. of people agree that employees should have the right to have their union recognised by their employers when a majority want that. The days of macho management are long gone. An NOP poll of senior human resource managers in Britain's leading 100 companies showed that business is relaxed about union recognition law. Three to one, those managers supported dealing with staff collectively, and said that staff were more likely to be committed to business plans and objectives if they were involved.
More than two thirds of employers said that collective arrangements helped in problem solving, in achieving working flexibility and in winning staff support for change. Furthermore, more than five to one, employers said that collective relationships had improved. An Institute of Management poll of managers showed that 54 per cent. backed a union recognition law.
The evidence shows that unionised workplaces are more likely to train staff and to have lower staff turnover, and that they are safer, and more likely to practise family-friendly policies.

Maria Eagle: Is my hon. Friend aware that accidents at work currently cost the United Kingdom £8.5 billion annually, that £4.5 billion of those costs falls directly on employers, and that accident rates are up to 50 per cent. higher in workplaces without union recognition? Union recognition is therefore better for employers and better for employees, as it enables greater efficiency and a safer workplace.

Mr. Sutcliffe: I entirely agree with my hon. Friend. She is right to say that small workplaces, particularly those with fewer than 50 employees, have more accidents. A 1994 Green Paper, published by the previous Government, showed that most industrial tribunal cases were brought against companies employing fewer than 50 people.
The Confederation of British Industry and the Opposition—although the Liberal Democrats cannot make up their minds on the matter—say that recognition should be decided by a majority of those eligible to vote, rather than by a simple majority of 50 per cent. plus one of those voting. They think that abstentions should have the same effect as votes against recognition—so that a 70 per cent. yes vote on a 70 per cent. ballot turnout would result in a no vote. If that rule applied to the election of hon. Members, only 14 would have been elected at the general election. Furthermore, no Conservative or Liberal Democrat Members would have been elected. That ballot proposal is absolute nonsense.

Mr. Oliver Heald: Does the hon. Gentleman agree that only about 25 per cent. of the private sector work force are in trade unions—most of which are in the larger companies? Does he agree also that, if trade unions are recognised after approval by only a majority of those voting, there will probably be a campaign of creeping unionisation in all Britain's modern industries that currently do not have unions? Does he want that to happen?

Mr. Sutcliffe: There is nothing wrong with that suggestion—which is why 47 of Britain's top 50 companies

recognise unions. Contrary to the Opposition's suggestions, we are moving forwards and not backwards. Staff involved in trade unions will be able to act on behalf of other staff.
A simple majority of those voting should suffice in determining union recognition. There were no trigger mechanisms in the Bills on devolution for Scotland and for Wales. If there is a dispute about "the relevant work force" between an employer and a union, a third agency—such as the Advisory, Conciliation and Arbitration Service, or a similar body—will have to settle the dispute.
The agency should also be independent, and should facilitate negotiations between employers and unions in agreeing the matter. If agreement cannot be reached, the agency would adjudicate on what comprises "the relevant work force". It would be wrong for either employers or unions alone to decide the bargaining unit.
The CBI proposes an exemption for employers who employ fewer than 50 people. The fact is that 90 per cent. of all companies employ fewer than 50 people. If our manifesto commitment is to be implemented, the right must be given to everyone at work, and not exclude 8 million people.
Employees in small firms need protection because of the stresses and strains of working in small business. As my hon. Friend the Member for Liverpool, Garston (Maria Eagle) suggested, most accidents and health and safety problems occur in small companies. Moreover, most industrial tribunal cases involve small companies. I therefore hope that we do not exclude small companies from the provisions.
The vast majority of employers work well with their employees. However, a small but significant minority of employers bully and intimidate their staff. The Trades Union Congress recently ran a "bad boss hotline", which was swamped by 5,000 calls in only one week. We therefore have to be cognisant of what is happening in the real world.
The CBI also wants unions to go through two more hoops—another two-hurdle test—which I think would not only be unworkable but invite unscrupulous employers to put pressure on union supporters in their companies.
As the Minister said, the law's objective must be to create a new climate of industrial relations—and so honour Labour's manifesto commitment to improve employment rights and make stronger economic progress. He has attended many meetings of our Back-Bench committees, and knows the great support among Labour Members for a workable solution to recognition issues.
How many times have we heard employers and human resource managers say that staff are the biggest asset of any company? Now is the time for them to prove it. Union recognition is not a matter of the Government doing trade unions' will, but of employees deciding that they want to join a trade union, which they want to be recognised. Enabling employees to make that decision should be the Government's objective.
Union recognition legislation is not about redressing the wrongs of the past. We are dealing with a new situation in a new world. The global economy has increased competition, stress and pressure at the workplace. Inevitably, we will have to ensure that there is greater communication, involvement and understanding in the workplace. Fairness at work legislation will provide a sound foundation for employment policies to take us into the 21st century. It will also be another manifesto commitment that has been honoured.
It is right to consult on the matter. However, if agreement cannot be reached, Ministers will have the support of the majority of the parliamentary Labour party in doing what is right, in reaching a simple, effective and workable solution. Recognition is not about revenge for spiteful past acts, or for the previous Government's sequestration of union funds. It is also not about seeking favours from a Labour Government, who were elected with trade union support. It is about establishing a modern working environment.
A modem democracy should not set hurdles for some that it does not require others to go through, but should establish a framework that balances the needs of employers and employees. I hope that the Government will succeed in gaining the confidence of Britain's workers—a confidence that was so badly shaken, and lost, by the previous Government.
As John Smith said, if trade unions did not exist, they would have to be invented. Ministers are right to try to facilitate consultation, but Britain will be able to achieve its objectives only if we have conciliation in the workplace. If we cannot reach an agreement on union recognition, the Government will have to set minimum standards to stop workers being exploited.
I am prepared to wait for the White Paper, which I hope will be published in the not too distant future. The Government are getting it right, and they have the support of the vast majority of the PLP.

Mr. Dale Campbell-Savours: On a point of order, Mr. Deputy Speaker. I am very sorry to interrupt the debate, but I should like to raise an issue that relates not to registration or declaration but to advocacy.
You will be well aware of the rules that have been developed after the Nolan recommendations and the reports of the Standards and Privileges Select Committee. Motion No. 1 on today's Order Paper—on trade union recognition—lists the names of Mr. William Hague, Mr. Peter Lilley, Mr. Stephen Dorrell, Mr. John Redwood, Mr. David Heathcoat-Amory and Mr. James Arbuthnot. The motion also mentions the issue of recognition, and the need in a ballot for support of 50 per cent. of workplace members.
Under the rules of the House, as I understand them, the matter of advocacy may arise when an hon. Member who has placed his or her name on a motion on recognition might speak on that issue in the Chamber. The hon. Member will clearly be advocating on the issue. We have already heard one speech from the Opposition spokesman, the right hon. Member for Charnwood (Mr. Dorrell), which may well be the subject of a complaint. I do not know whether there will be a complaint, but understand that some hon. Members are already discussing those matters.
I wonder whether you will rule that any hon. Member who has an interest in recognition should consider whether it is right for them to advocate in the matter in this debate if his or her name is on the motion. That basically means that the five other Conservative Members who can speak in this debate—

Mr. Deputy Speaker: Order. I have the gist of the hon. Gentleman's point of order. These are matters for individual Members of Parliament.

Mr. Campbell-Savours: indicated dissent.

Mr. Deputy Speaker: Order. The hon. Gentleman has asked me to give a ruling, and I am giving him one.
He may not like it, but I am giving it. These are matters for the individual Member of Parliament. Each individual Member knows how to conduct himself or herself. If there is a complaint from any hon. Member, it can be taken up with the Parliamentary Commissioner for Standards.

Mr. Campbell-Savours: rose

Mr. Deputy Speaker: Order. Perhaps the hon. Gentleman will take his seat when I am standing. He is eating into the time of a short debate. In fairness to other hon. Members who are waiting to speak, he must give due regard to them.

Mr. Campbell-Savours: rose

Mr. Deputy Speaker: Is it another point of order?

Mr. Campbell-Savours: Will you then make it clear to the rest of those who are named on the motion simply that they should take advice before they advocate in this Chamber on these matters this evening? That is a matter that rests with you, Mr. Deputy Speaker.

Mr. Deputy Speaker: I know what rests with me. Let me repeat: each hon. Member knows how to conduct himself or herself. I have no need to give anyone advice at this stage. They know the rules, and they know how to conduct their affairs.

Mr. David Chidgey: The Conservative Front-Bench team is right to table the motion to challenge the Government's policy on trade union recognition. I congratulate the Minister of State, Department of Trade and Industry on his frankness in saying that he was not going to tell us what his proposals are tonight—at least he did the House the courtesy of being honest about it—but he did say that it was a question of how recognition of trade unions will operate, not whether it will operate. That is the question: how will it operate? Sadly, we still wait for an answer.
For far too long, the Government have been prevaricating over that policy, relying on vague promises and even vaguer definitions. To rely on the catch-all phrase
. "Trade union recognition shall be a legal right where a majority of the relevant workforce votes in favour
is not enough. Relevant to what? Relevant to whom? The Government have had time to come to the House and to give us a better understanding of what their policy is.
Having said that, I think that Conservative Members are wrong to simplify the case of trade union recognition, concentrating on the single issue of the percentage of workers voting in a particular electorate, however it might be defined. One of the things that industrial relations and negotiations over the past 30 years have shown clearly is that establishing trade union recognition is far more complex than that. Negotiations that have taken into account the character of a company, its management structure and the location and skills of the work force, have been the successful negotiations that have led to trade union recognition.
It is wrong also to suggest, as the motion does, that union recognition will occur only by virtue of compulsion—note the word "compulsory" on the Order Paper—through a majority vote. As hon. Members on both sides of the House have pointed out, many of the United Kingdom's largest and most respected employers have willingly negotiated union recognition in the interests of good industrial relations and good business sense. All would obviously welcome that.
The issue is the establishment of a legal right for an individual worker to be represented by a union, should he so wish—note "should he so wish"—a right to be used as the last resort where negotiation proves impossible.

Mr. Michael Clapham: Is the hon. Gentleman making the point that, although industrial relations procedures have been agreed generally by voluntarism, if a formula is introduced for union recognition that is any different from 50 per cent. plus one, employers would totally unravel the conciliation and consultation procedures that operate in industry now?

Mr. Chidgey: I thank the hon. Gentleman for that intervention. It was a telling one. I do not think that the issue is as simple as that, although I take his point. I am suffering from a cold, so my speech is not as clear as it would be, but perhaps, Mr. Deputy Speaker, you will be tolerant of that. As my argument develops, perhaps I can show the hon. Gentleman how those points can and must be addressed by the Government.
It is equally wrong to assume that the law does not need changing to provide individual rights for the individual worker. There are far too many examples of workers' wishes being frustrated by intransigent firms that refuse to recognise or, even worse, that derecognise established unions. I could mention some classic examples, although I am conscious that other hon. Members wish to contribute. I have to say just "Walkers Crisps" and I am sure that that will raise a few points of recognition among Labour Members. Even Railtrack has basically derecognised its white collar staff, despite the fact that some 92 per cent. of Railtrack's white collar workers wish to stay within the union negotiation machinery.
The Government's amendment is a disappointment because it still fails to address the key issue. As has been pointed out, many of the initiatives they list are laudable and already attract all-party support. Certainly, the Liberal Democrats support the broad ideals of adopting a partnership approach to setting decent minimum standards in the workplace; how could any sensible person think otherwise?
We agree that those ideals are essential for competitiveness and business success, but the key issue, which the Conservatives are right to raise, is the mechanism to be introduced to establish trade union recognition. The Government's amendment claims that they should be congratulated on being committed—I must quote this; it is important—
to fulfilling the Government's commitment to enable workers to enjoy union recognition where a majority of the relevant workforce vote in a ballot for the union to represent them.
That is an awful lot of commitment to an undefined and non-specific formula. That lack of precision creates confusion and concern among unions and employers alike.
I take one example, which is close to my heart because it concerns a local haulier in my Eastleigh constituency. He runs a third-generation family business. He tells me that he employs some 20 drivers, of whom four belong to a union. Most of his drivers have been with him for many years. All are paid on the same pay scale, regardless of whether they belong to a union, as hon. Members might expect from a responsible employer.
That employer knows his drivers very well; they are obviously friends and have worked together for many years. He estimates that, should there be a ballot on union recognition, no more than six or possibly eight of the 20 would bother to vote, such is their attitude to the issue. That illustrates the predicament of relying on a quick and simple ballot to decide on recognition.

Mr. Peter Bottomley: The House is listening with interest to the hon. Gentleman's balanced speech. Does he agree that, from what we have heard from Labour Members, Ministers are willing to talk more openly behind the closed doors of Labour party meetings in this House than in the Chamber? Is that not the difficulty in trying to have this debate?

Mr. Chidgey: I thank the hon. Gentleman for that intervention, but, as clearly the doors were closed, I cannot possibly comment on what might have been going on behind them.
It is not good enough to hide behind, if not closed doors, then such phrases as
a majority of the relevant workforce".
The Government know that that is just a smokescreen for masking what is clearly the complex and potentially divisive issues surrounding union recognition.
It is not good enough, either, to offload the problem on to the Trades Union Congress and the Confederation of British Industry and expect them to come up with a solution. Although they have done sterling work—they should be congratulated on that—just a cursory glance through the annual reports of the Advisory, Conciliation and Arbitration Service over the past 20 or 30 years shows that expecting the TUC and the CBI to resolve the problem is not enough. Records of attempts in the 1970s to establish a strategy framework for union recognition through ACAS make it clear that both the TUC and CBI held and still hold totally intractable and different positions.
I am sure that most hon. Members will have received—in fact, it is clear from the contributions so far in this debate that most Members have indeed received—extensive lobbying packages from both the TUC and the CBI, and they are using them according to their views. It is clear that neither the TUC nor the CBI has shifted its fundamental philosophical position on this issue for more than 30 years, so it is totally unrealistic for the Government to attempt to shift the burden of


responsibility for defining a consultative and democratic process for union recognition to those two parties, which have held diametrically opposed ideological standpoints.

Mr. Woolas: Will the hon. Gentleman give way?

Mr. Chidgey: Yes, but this will be the last time.

Mr. Woolas: I listened with interest to the example that the hon. Gentleman gave. To my mind, it is a good example of precisely why the Government are correct to consult both sides of industry. If his starting point is that the two sides have irreconcilable positions, surely the Government are doing the responsible thing. Is not the hon. Gentleman falling into the trap laid by the Conservatives? The Conservatives have chosen to debate trade union recognition at exactly the time the Government are consulting. If Ministers were to lay down precisely how to achieve the commitment that they gave, would he not be complaining about the lack of consultation?

Mr. Chidgey: The Government might be consulting the two sides of industry—the TUC and the CBI—but I am interested to know whether they are consulting both sides of the Labour party, let alone the rest of the House.
For Members who believe that union recognition is simply a matter of deciding on a formula, reference to the annual report of the Advisory, Conciliation and Arbitration Service for 1981 will prove enlightening. In that report, ACAS set out details of its experience of involvement in implementing trade union recognition under the statutory procedures of the Employment Protection Act 1975, with which many hon. Members will be very familiar for various reasons.
ACAS examined some 1,600 cases involving recognition. It is worth noting that more than 80 per cent. were resolved voluntarily. ACAS found that the key issues included: the level of existing union membership—there were often several unions in the same workplace, each hoping to be the recognised union; what agreement there was for one, two or even more unions to be recognised and involved in the negotiating group; the grading of the work force and their skill base—whether they were blue or white collar; the location of the company—whether it was on multiple sites undertaking the same or different tasks, or undertaking a single task on a single site; and the structure of the company—whether it had a centralised personnel department or bargaining was site-specific.
It is worth stressing that, to establish a case for union recognition, ACAS surveyed workers, asking, among other things, whether they were union members; whether they supported collective bargaining in general; and, if they supported representation by the applicant union, whether they would join that union or would prefer representation by another union. ACAS took account of all these factors when it came to its conclusions, but the one thing that it did not do was introduce a ballot to establish the case for recognition. In fact, it took the view that a ballot could be useful in applying a test for recognition but could rarely determine the issue by itself.
In more than 90 per cent. of cases, ACAS received a response rate of more than 65 per cent. On looking more closely at those surveys with low response rates,

ACAS concluded that in half there was enough evidence to support recognition. However, in some cases, ACAS did not consider that majority support among respondents warranted recognition, thus showing how complex the issue can be.
It is clear from the report that ACAS was scarred by the experience. Let us remember that ACAS is a tripartite organisation, comprising representatives from both sides of industry, from the CBI and the TUC, and independent representatives. Clearly, ACAS found that its involvement with the statutory process sat uncomfortably with its independent arbitration and conciliation role. It is not surprising that it reported that it was
extremely difficult to envisage a statutory procedure for compulsory trade union recognition which could operate smoothly.
It is not surprising that, in a letter in 1981 to the then Secretary of State for Employment, the chairman of ACAS wrote:
The experiences of the last three years of operation of the statutory procedures have shown the difficulties of operating without criteria and the damaging effect on industrial relations which can result from the Court's interpretation of the statutes …The Council wishes me to advise you that in the light of the increasing difficulties which it is encountering it cannot satisfactorily operate the statutory recognition procedures as they stand".
It is interesting to note that, when the Government were challenged on their position on union recognition during the general election campaign, it eventually emerged that they took the view that any disagreements about recognition would go initially to ACAS and then to a central arbitration committee which would in future be headed by a judge. ACAS has made it clear that it is not keen to undertake that role.
ACAS clearly tended to favour a voluntary approach, which had been successful in 80 per cent. of cases referred to it, but that still leaves 20 per cent. of cases unresolved. It is to deal with that 20 per cent. that the Government must come up with firm, precise proposals on how they intend to ensure that the individual wishes of workers are not frustrated.
We believe that the rights of individual workers should be protected. Workers should be able to exercise their wish to join or not to join a union. I can understand the Government's difficulties—

Mr. Eric Clarke: rose—

Mr. Chidgey: No, I must continue.
Clearly, positions are entrenched, and people will not budge. There is a record of increasing difficulty in operating statutory recognition procedures. The Government claim that they believe in consultation and in a partnership approach, so let them bring their proposals to Parliament, and let the House consider, deliberate and decide.

Mr. Gerry Steinberg: I understand that I do not need to declare an interest but, for the benefit of the House, I am happy to declare that I am a member of the Transport and General Workers Union and of the National Union of Teachers.
It is every worker's right to belong to a trade union. Trade unions were hounded and vilified by the previous Government. We had 18 years of constant, hysterical


attacks, and we heard this afternoon from the right hon. Member for Charnwood (Mr. Dorrell) that the Conservatives' attitude to trade unions has not changed.
In May last year, the Labour party won the election, and the manifesto on which all Labour Members fought that election was clear, certainly to me. The manifesto stated:
People should be free to join or not to join a trade union. Where they do decide to join and where a majority of the relevant work force vote in a ballot for the union to represent them, the union should be recognised.
Regardless of the huge majority that we won, the Confederation of British Industry, in its arrogance, remains opposed to the principle of recognition. I am well aware of why the Opposition called this debate today, but it seems that not many Conservatives are interested in attending.
It is right that the Government now keep their manifesto commitment on union recognition, which is the cornerstone of protection for workers in employment. There must be no compromises. Why? First, it is a basic civil right for people at work to be represented by a union if they so choose. Union recognition is simply the right to be heard. Secondly, there are many cases of exploitation in employment across Britain, with many examples in my own northern region. I appreciate that many companies treat their staff very well, and some treat them reasonably well, but there are shocking examples of exploitation which have been highlighted by the Trades Union Congress's bad bosses hotline which my hon. Friend the Member for Bradford, South (Mr. Sutcliffe) mentioned.
Thirdly, most workers, given the opportunity, would choose to be represented by a union. A TUC-commissioned national opinion poll revealed that 77 per cent. of people make this choice. In such circumstances, employers should be required by law to negotiate with a trade union. I sincerely hope that the rumours are untrue that the Government are backtracking on their commitments after intensive lobbying by the CBI, which has expounded one myth after another.
Myth No. 1 is that unions hold back business. As we have heard this afternoon, most of Britain's top companies recognise unions; 44 of the top 50 FTSE companies recognise unions; 42 of the 45 companies that employ more than 25,000 workers recognise unions; Britain's biggest employer is also the most heavily unionised of the large supermarket traders.
Myth No. 2 from the CBI is that negotiations should be left to voluntary arrangements. Unions prefer to negotiate with employers on a voluntary basis, but why should the management veto the democratic rights of a work force? The introduction of a law will encourage the voluntary resolution of recognition claims. Other laws already require employers to consult and deal with their work force on various issues, most notably on health and safety. That rarely causes a problem.
Myth No. 3 is that union recognition will encourage more industrial action and strikes. That is not true. If an employer refuses to deal with or recognise a union, the only remedy open to the work force is industrial action. A statutory procedure will make it more likely that such disputes can be resolved without industrial action.
I do not have enough time to go into every detail of the CBI's attempts to frustrate trade union recognition, but I shall concentrate on a few of the worst examples.

Mr. Bercow: Go on. Go for it.

Mr. Steinberg: I do not want any comments from the hon. Gentleman, who has a big mouth and should learn to keep it shut occasionally. 
The CBI wants abstentions in a recognition ballot to count as votes against. It argues that a majority of those eligible to vote, not of those who cast a vote, must be achieved. The CBI opposed proposals for that requirement in strike ballots, but that is not surprising. There is no justification for having different rules for trade union recognition ballots from those that apply to other ballots, including the election of Members of Parliament. A simple majority of 50 per cent. plus one of those who vote should lead to automatic recognition. Requiring a majority of those entitled to vote would be a recipe for industrial unrest.
If the principle that the CBI is in favour of had applied to the recent general election, a large majority of Labour Ministers and Back Benchers would not have been elected. On 1 May, I received 31,102 votes. My nearest rival, the Conservative candidate, got 8,598 votes. My majority was 22,504.

Mr. Bercow: That was in spite of you.

Mr. Steinberg: I have told the hon. Gentleman what I think of him.
The electorate of the City of Durham was 69,417. I would not have been elected under the CBI's destructive proposals. It is a fair bet that no Conservative Members would have been elected, either. My hon. Friend the Member for Bradford, South (Mr. Sutcliffe), who has obviously done some research, substantiated that this afternoon, so I think that I would win my bet. However, looking at some Conservative Members, I am beginning to change my mind. Perhaps it would not be such a bad idea to have that system in the House of Commons.
The proposal is nonsense. A ballot cannot be conducted in that way. Requiring a majority of those entitled to vote would be a recipe for industrial unrest. Workers will accept the result of a fairly conducted ballot under well-understood principles. The CBI's proposals would rig the outcome in advance. They cannot be accepted.
Those on the Labour Front Bench were scathing about the idea when we were in opposition. In November 1996, my right hon. Friend who is now the Secretary of State for Education and Employment said:
What justification has the right hon. Gentleman for the changes he proposes to make in the balloting rules and procedures to deny people a simple majority? Is it not a fact that, on 1 November, on the Radio 4 'Today' programme, he said that he had got the proposal from his local golf club rules? Frankly, that is an insult to everyone engaged in industrial relations."—[0fficial Report, 19 November 1996; Vol. 285, c. 846.]
That argument promoted by the Opposition Front Bench in 1996 when a Tory Government were in office is equally valid today with a Labour Government in office.
Another area of disagreement is the CBI's insistence on a minimum threshold under which small businesses would be exempt from recognition procedures. Half of


Britain's work force is employed in enterprises with fewer than 100 employees. The CBI wants to disfranchise 50 per cent. of this country's work force, excluding them from the protection of legislation on recognition. That is unacceptable.
The last threat to trade union recognition that I want to mention is the definition of the bargaining unit. That is crucial to the operation of a statutory recognition procedure. The CBI wants the employer to have the sole right to define the extent or limitation of the bargaining unit. That would enable an employer to exclude particular sections of the work force—for example, by separating white collar from blue collar workers—or to define the bargaining unit as the whole company when a trade union is seeking recognition for a specific section. Unscrupulous employers would change the definition to suit their circumstances. The union should have an equal right to define the group of workers it seeks to represent. If that cannot be resolved by negotiation or conciliation, an independent representation agency should rule. The employer should have no veto.
Our approach to fairness at work is underpinned by three fundamental principles. Access to justice should not depend on the number of people employed at a workplace or the type of work that is undertaken. It should also not depend on hours of work or length of service. The principles should apply to all employees at all workplaces.
The first principle is the right to representation. Everyone at work should have a basic right to representation in their dealings with their employer. That is a democratic right for every citizen, which should be enshrined in legislation.
The second principle is the right to recognition for collective bargaining purposes. Trade union recognition should be automatic when a majority is in favour. If the issue has to go to ballot, those voting should demonstrate the majority. There should be no exceptions to the collective bargaining agenda. Trade unions and employers should be free to discuss and negotiate on the whole range of issues that apply to the work force. Trade unions and employers must be involved in a partnership to raise the training and skill levels of the work force.
The third principle is the right to consultation. All workers must have the right to be consulted on matters that affect their working lives, including pay, working conditions and their future job security. If the CBI's gerrymandering is accepted, the law will be so weak that it will no longer be in line with the manifesto on which I fought the general election. There must be no compromise.

Mr. Andrew Robathan: I declare that I have no pecuniary interest in the debate, but I have an interest in good industrial relations, good working conditions for all employees and employers and the prosperity of this country, furthered by good industrial and business conditions. That is what the debate is about.
The hon. Member for City of Durham (Mr. Steinberg) was uncharacteristically discourteous to my hon. Friend the Member for Buckingham (Mr. Bercow). He was also a little off message. He may have to tune in his bleeper later and discuss that with the Whip.

Mr. Steinberg: I do not have a bleeper.

Mr. Robathan: In that case, the hon. Gentleman is definitely off message. However, he is not normally as rude as he was to my hon. Friend.
The hon. Gentleman spoke about myths. The hon. Member for Bradford, South (Mr. Sutcliffe) spoke about the realities of trade union membership. The Minister of State, who, sadly, is not in his place, spoke about progress and said that we must not go back in time. We need to go back a little way and think about the past. Experience of the past colours our view. I fear that we may be going back to the bad old days if we are not careful.
Among some Labour Members there is a romantic notion that trade unions exist to protect the rights of very downtrodden workers from the wrongs of evil Victorian mill owners and the like. [HON. MEMBERS: "Hear, hear."' I hear the unreconstructed voice of old Labour responding. My hon. Friend the Member for Worthing, West (Mr. Bottomley) spoke about trade union history. I accept that trade unions have done much good. Improvements in working conditions and pay owe much to their work.
At the same time, however, I have seen many who have regarded union power as almost an end in itself—indeed, a route to political authority. My youth was characterised by such marvellous people as Jack Dash. I recall him well, and how he almost single-handedly whipped up London dockers and destroyed the London docks. I recall Red Robbo, as will Labour Members who were in the House in the 1970s. He did lasting damage to the British car industry. At that time, trade union leaders were in No. 10 Downing street, where it was beer and sandwiches all round. I realise that it will be Chianti and Tuscan wine in future. My right hon. Friend the Member for Charnwood (Mr. Dorrell) referred to the White Paper "In Place of Strife". I remember Barbara Castle's dashed optimism on that.
The past winter has been the first that the country has had to endure under a Labour Government for 19 years. I remember the winter of discontent 19 years ago. The Labour Government under Lord Callaghan, as he now is, went into that winter ahead in the opinion polls, but came out of it to find that the country had at last seen sense. The electorate voted in a Conservative Government because of the chaos of that winter. I give Labour Members due warning that, after the chaos of this Labour Government, the people will be electing another Conservative Government.

Mr. Collins: My hon. Friend is giving us a fascinating history lesson. Does he recall that "In Place of Strife" was destroyed by a Labour Chancellor of the Exchequer, who undermined his Prime Minister by putting first his own links with the trade unions? Does he recall that that Labour Chancellor of the Exchequer subsequently became Labour Prime Minister? Might not history repeat itself?

Mr. Robathan: I must stay in order, so I beware of following too closely my hon. Friend's argument, except to say that I understand that the Chancellor of the Exchequer has been making various comments to various union leaders, which have been well reported in the press. Perhaps we shall hear from Government Front Benchers about that matter—although I doubt it.

Mr. Bercow: My hon. Friend has provided the House with some learned reflections on memorable trade union figures of this century. I am sure that he would not want his speech to pass without giving Labour Members the benefit of his confirmation that one of the people


who made the greatest contribution in the 20th century to British trade unions was none other than our noble Friend Lord Tebbit of Chingford.

Mr. Robathan: I am sure that my hon. Friend would agree that Lady Thatcher did so, too.
Since the winter of discontent, after 18 years of Conservative government, we have remarkable industrial relations. Indeed, they are the envy of the rest of Europe. We consistently have the lowest number of days lost to strikes—certainly in my memory. Does anybody in the House remember the English disease? That has been cured. We remember the closed shop, which has effectively been destroyed.
As a result of that excellent record of industrial relations, we have outstanding inward investment, which is praised by Labour Members. They must ask themselves why companies want to invest in this country. [Interruption.] They say that inward investment is declining; it is perfectly evident that that is because of what happened on 1 May. We have a profitable industry—profitable for employees as well as for those awful Victorian mill owners. The interests of employees are best served by prosperous companies and good industrial relations, not necessarily by trade union bosses.

Maria Eagle: The hon. Gentleman talks about Victorian mill owners. Will he comment on an employer in Liverpool who pays his staff £2.97 for a 12-hour week? The staff have had no pay rise for six years, and their employer charges them 12p each for a tea-bag. Does the hon. Gentleman think that that is good industrial relations?

Mr. Robathan: The hon. Lady raises a case of which I have no knowledge. Nobody in the House would defend bad employer practices. [HON. MEMBERS: "You are."] On the contrary. Nobody defends Victorian mill owners whipping their employees into work. We Conservatives are saying that employees are better off than ever before because of the industrial relations packages that we implemented.
The Government have a manifesto commitment on statutory trade union recognition after a ballot. How many people should have to take part in such a ballot? The hon. Member for City of Durham believes that the majority should be 50 per cent. plus one of those who vote. He must get that bleeper soon. The hon. Member for Bradford, South also said that he believed that. He might like to check his bleeper later.
Now that Labour is in government, we need to know what it is saying about trade union recognition. I asked the Minister of State, but he had nothing to say. The Labour manifesto states:
where a majority of the relevant workforce vote in a ballot for the union to represent them, the union should be recognised.
Surely we must be told what that means. We do not need the Prime Minister to consult on it. Of course unions and employers have different views. I am delighted that the Prime Minister appears to be taking the CBI's

position—but will it hold under pressure from his Back Benchers? That is what we would like the Minister for Small Firms, Trade and Industry to answer.

Mr. Boswell: Has my hon. Friend noticed, as I have, that the Minister of State clearly prefers the company of his officials to that of his Back Benchers who have been contributing to the debate?

Mr. Robathan: I am grateful to my hon. Friend. I am sure that the Minister's officials are excellent company, although I would have hoped that he found the company of his Back Benchers congenial, too.
Following the election, before which the unions gave the Labour party such sterling service and support—much of it reflected in the Register of Members' Interests—the unions want their pound of flesh. In this case, that is statutory union recognition. Although the CBI is not always right, it is on this occasion. Good employee relations are not best served by statutory union recognition. Nobody approves of bad employers, but such recognition would not further good employee relations.

Mr. David Watts: If the hon. Gentleman is so opposed to bad employers, why, following the past 18 years, are there still employers in my constituency and others who pay £1.20 an hour? If Conservatives are so concerned about employee rights, why did not the Conservative Government take action on the matter?

Mr. Robathan: If the hon. Gentleman would like a long debate on the minimum wage, I should be very happy to participate. My hon. Friend the Member for Daventry (Mr. Boswell) may go into that in his own speech. I am not defending one bad employer; I am defending good industrial relations after 18 years of Conservative government. Why did we have the winter of discontent after four or five years of a Labour Government if Labour's practices were so good?
What is the new Government's real position? They raise in their amendment what is likely to be their real position—although it is clouded by other things. They talk about the minimum wage and the social chapter. When unemployment increases following the introduction of the minimum wage and the social chapter, I look forward to hearing Ministers explain why that has happened.
I urge the House to support the motion. We have prosperous industry, good industrial relations and a well-off work force. Those have been created by not having the form of legislation proposed by the Government. Let us remember the picketing and secondary picketing. Some Labour Members may have been at Grunwick in the 1970s, which I recall, or the Orgreave coking station. Some may have been at Wapping. One wonders whether any Labour Member defended Rupert Murdoch's actions at Wapping, and whether any would now criticise him. I should like to hear Labour Members criticise Rupert Murdoch in later speeches.
I remember the three-day week, under a Conservative Government, but I remember more than anything the winter of discontent, which has coloured industrial relations since 1979. The new Government have learnt nothing from the past 19 years. They hear threats from


Bill Morris, who says that there is no scope for compromise. He says that statutory trade union recognition
is a defining issue for trade unionists. There is no room for compromise. The Government will not be able to fulfil its commitment to fairness at work by legislation for bad employers, which is what a compromise would mean.
We know what the trade unions believe, but not what the Government believe. It is fair that we should know. The Government find themselves impaled on a fork—they do not know which way to go.
I paid a visit recently to a business in my constituency which is the third largest private employer in Leicestershire. I asked employees about their pay and conditions, which they all said were marvellous. Furthermore, each employee has private health insurance—one might say that they should not need it—from the employer, who pays higher wages than his competitors and is more profitable. That is an example to employers and employees. I further believe that good practices by employers lead to profitable businesses, happy employees and no strikes. That is what we are working for, and it is not what recognition will bring.
Share rights for employees have been mentioned in the debate. Asda—of which my hon. Friend the Member for Tunbridge Wells (Mr. Norman) has been a distinguished chairman—offers every employee share rights. That is the way forward—that is progress. The Minister's proposals are going backwards to the ideologically bankrupt bad old days. He also mentioned falling membership of trade unions. Are the proposals designed purely to bolster that falling membership? I fear that they might be. We have good industrial relations, good working companies and improving pay for employees. We do not need further statutory union recognition and bad industrial legislation.

Ann Keen: I wish to declare an interest to the House. I am proud to be a member of the GMB, and I am secretary of the GMB group in Parliament. I am privileged to be the vice-chair of the trade union group in Parliament.
In the short time that the Government have been in power, they have made great steps forward to modernise and support industrial relations and social partnership within the world of work. They have produced a significant—indeed, historic—Bill to introduce a national minimum wage, on which trade unions and employers have campaigned for many years.
After the general election in May last year, the Prime Minister asked the TUC and the CBI to "narrow the gap" on trade union recognition. Key areas have been discussed with both parties, and great progress has been made. The expected White Paper, "Fairness at Work", will bring about much-needed legislation to bring Britain's business and workers into a modern, thriving economy.
Sadly, far too many employers do not realise voluntarily that a change of Government means a change of attitude at work. Such a change of attitude is expected. Most employers treat their staff fairly, but too many take advantage of the lack of legal protection to exploit and bully their staff. Without the support of a union, people are often unable to enforce their legal rights.
I should like to say a few words about a dispute that is taking place in west London, affecting the constituencies of my hon. Friends the Members for Ealing, Southall

(Mr. Khabra) and for Hayes and Harlington (Mr. McDonnell), who is in his place. Most of the workers at the company, Noon Products, are part of the west London Punjabi community that extends into my own constituency of Brentford and Isleworth.
Noon Products provides chilled and frozen ready-made Indian meals for supermarkets, including Sainsbury, Waitrose and Somerfield. Almost all the production workers at Noon Products approached the GMB and voluntarily joined within a three-week period during October 1997. They wanted the GMB to help resolve the many grievances that they had with the company—for example, low pay, excessive hours, favouritism and an unequal pay structure.
The GMB has continually asked to meet with the company to discuss the grievances, and union rights and recognition. Noon Products continually refuses to meet the GMB, or to acknowledge that more than 80 per cent. of the work force—250 workers—are GMB members. The company has tried to victimise a GMB steward, Rana Hussain, and the pressurise members to leave the union continues. The company has appointed a new senior supervisor to pursue that objective.
More than 15,000 people in one week signed a petition to protest at the way in which the community and the work force at a local company were being treated. Along with my hon. Friends the Members for Southall and for Hayes and Harlington, I am pursuing the matter, and the petition has been taken to Downing street. The GMB has called upon the company to invite an independent body to ballot the workers on union recognition, and has suggested that the Advisory, Conciliation and Arbitration Service or the Electoral Reform Society be involved. The company has stated that it will abide by any industrial relations proposals only when they are made law.
Many of the work force are, of course, women, and women at work today continue to have a rougher deal than their male colleagues. There is still a pay gap.

Mr. Dismore: As a fellow member of the GMB, could I refer to the problem of recognition—particularly affecting women workers—in the casino industry, where the GMB has been waging a campaign on recognition? A dispute with Napoleon's casino—where 60 per cent. of the work force are GMB members—has been going on for eight months. The owner, David Allan, and the manager, Kevin Hapley, have been campaigning against union recognition. Through the GMB, there have been two applications to industrial tribunals on trade union victimisation. Is not that another example of bad employers trying to defeat the will of the work force, because there is no law to protect them?

Ann Keen: I thank my hon. Friend for those comments. It is obvious that there is still much to do, and trade union recognition is the only way forward.
There is still a glass ceiling for women in many organisations. Too few employers operate family-friendly employment practices that make equal opportunities policies a reality. Without trade unions, life at work for many women would be much worse.
Women make up half the work force. Many work in small businesses or on a casual homeworker or other flexible basis, where they are extremely vulnerable to unscrupulous employers or managers. As has been stated,


in 1997—towards the end of this century—the TUC felt it necessary to set up a bad bosses hotline. That revealed a catalogue of exploitation, bullying, low pay, long hours and job insecurity. More women than men who worked for firms employing fewer than 50 staff made calls to the hotline.
The hotline revealed care homes, which are a main employer of women, as one of the three worst industries. More than 500,000 people work in care homes, and 86 per cent. of them are women. I shall give an example from the hotline.

Mr. Bercow: rose—

Ann Keen: I will not give way.
One worker had just had a pay rise—to £2.86 an hour. For that payment, round-the-clock shifts were expected, with no sick pay, pension or holiday entitlements.
Another example of non-union recognition is the cross-channel ferry industry. Alcohol is big business on cross-channel transport, with staff expected to take the consequences when passengers become drunk and abusive. One of the women who contacted the TUC's hotline worked as a steward for a catering company on a cross-channel ferry—a company that does not recognise trade unions. She and her colleagues regularly have to put up with harassment from drunk passengers, yet, while airlines refuse to serve alcohol to passengers who are drunk, that company tells its staff to continue to serve and sell alcohol even though they may feel unsafe.
Trade unions have changed a great deal in recent years. Partnerships rather than adversity now dominate industrial relations. Unions have changed how they work and how they campaign. Through campaigning and negotiation with employers, unions have promoted working conditions that help members to balance work and family responsibilities, which is so important in all families, but particularly so when lone parents are at work. Union recognition is good business practice. Macho, top-down management is long past its sell-by date. Organisations that treat staff as partners succeed, and manage change with the best benefit.
A recent poll of human resource managers in the top companies found that they were relaxed about trade union recognition.

Several hon. Members: rose—

Ann Keen: I am sorry, but I am short of time and cannot give way.
Such managers value the opportunity that trade unions bring for good communication; they recognise that it is an effective way in which to deliver loyalty and commitment, and that it is good for business.
Finally, I want the House to recognise the work that has been done at national and European level by the good partnership that the TUC and the CBI have established. They have worked effectively together to draw up policies and directives to benefit women and men at work. Many new opportunities are opening up in the new world of work.
The new deal for young people had its national launch today. Welfare to work and the much-needed modernisation of the welfare state are encouraging more people to take up work, but some of them are very vulnerable. To help everyone to succeed with new work, we also need new unionism. We have that new unionism. It is emerging at the end of the 20th century, as unionism did in the 19th century, to take up those new challenges.
I hope that the House will take seriously its business as regards the economy as well as the way in which it represents constituents, many of whom we hope are at work. The TUC and the CBI should be given the best wishes of the House for good and progressive debate, as should our Government, to deliver a modern trade union partnership with industry that will advance fairness and justice for Britain's workers and the business community. As we have said, we may not be the biggest country in the world—we certainly are not the biggest in the world of work—but we could be the fairest, which would make us the best.

Dr. Julian Lewis: I wish to be brief, because I want to give my hon. Friend the Member for Westmorland and Lonsdale (Mr. Collins) an opportunity to speak, as I know he is keen to do so.
During the debate, we have had a fair number of trips down memory lane, with repeated incantations about 18 years of Conservative rule. I wish that I had £5 for every time Labour Members referred to those 18 years. They think that it is some sort of insult to the Conservative party, but, by referring to that long period in which Conservative Governments were elected, re-elected and re-elected again, they are insulting the judgment of the British people who, time and again, saw fit to re-elect Conservative Governments and reject Labour, often because of its espousal of the very policies that the proposed Government measure would reintroduce into industrial relations.
We have heard derogatory references to "the enemy within", as an expression used by Margaret Thatcher. I remember when she used that expression and the circumstances in trade union affairs about which she used it. I remember the events in the Civil and Public Services Association, which was infiltrated by the same Militant Tendency—or Revolutionary Socialist League as it really was—that it took Labour so long to gear itself up to expel from its ranks. I remember when Kate Losinska, a genuine trade unionist, was attacked, beaten and tripped downstairs by the enemy within.
Yes, the Militant Tendency was the enemy within the CPSA, and my right hon. and noble Friend Baroness Thatcher was right to use that expression. She was right to use it not only about the termites burrowing in from the Fourth International, but about the National Union of Mineworkers and Mr. Scargill and his sponsors—

Mr. Clapham: Does the hon. Gentleman realise the enormous contribution that those who worked in the mines made during the first and second world wars? Does he realise that, before the first world war, there were more than 1 million miners and that enormous sacrifices were made in mining communities? Is he slighting that contribution?

Dr. Lewis: On the contrary: it was Mr. Scargill who slighted those brave miners when, time and again, during


those arguments he refused to give them a ballot on whether they should be conducting an industrial dispute. Mr. Scargill would not give his members the right to a ballot while he used them to pursue his political objectives rather than look after their interests. His campaign was funded by foreign communist regimes, which openly collected huge sums of money—there was no voluntarism about contributing for Soviet trade union members, believe me—to help him undermine British industrial relations while the people of those regimes were being incarcerated for political offences.
I also remember how a change came about, so I shall move on to the more positive aspects. The introduction of compulsory secret postal ballots was the reason for that change. The measures were partly introduced in the Trade Union Act 1984 and completed in the Employment Act 1988.
I pay particular tribute to the late Lord Wyatt of Weeford, whose memorial service I had the privilege to attend last week, for his fantastic work to expose communist manipulation in the Electrical Trade Union and to highlight the shortcomings in the Thatcher Government's plan—which did not include making secret postal ballots compulsory until he drew those shortcomings to their attention and the measures were drawn into the legislation. I hope that the Minister will reply to this point, even if it is the only point to which he replies, as even if the Government cannot—

Mr. John McDonnell: My hon. Friend the Member for Brentford and Isleworth (Ann Keen) referred to a dispute in which a number of my constituents are engaged. It is important that we use the House for constructive debate and, if we can, to give constructive assistance in that dispute, which concerns 80 per cent. of a work force who have joined the GMB and request that their employer assists them in organising a ballot to ensure that, as a result, the employer recognises the union.
Will the hon. Gentleman join me in uniting the House to call on the employer to recognise the trade union that now represents 80 per cent. of the work force and, in so doing, assist in the resolution of the dispute?

Dr. Lewis: The issue relates to the point that I was making, so the hon. Gentleman will appreciate that I will not pronounce on that dispute without more information; but we may reach agreement on the following point. Does he agree—and, with due respect, more important, does the Minister agree—that, whatever threshold the Government finally decide on for their legislation—whether it be 50 per cent. of those voting or of those entitled to vote, or some other percentage of either—they should undertake today that the votes will be in a tamper-proof, secret, postal ballot?
The 1984 and 1988 legislation, to which I alluded, greatly improved the trade union leadership's representativeness of its members because of the introduction of the secret postal ballot, which stopped ballot rigging and led, for example, in the Manufacturing Science and Finance Union to the replacement of a Stalinist such as Ken Gill on retirement by a moderate such as Roger Lyons.

Mr. Harold Best: I want to deal with the facts. The hon. Gentleman mentioned the

Electrical Trades Union, of which I was a member. The villainy inside the ranks of that union was exposed not by Lord Wyatt, but by people such as myself—rank and file shop stewards. In 1962, I was elected branch secretary in Leeds as an anti-communist. It is important that the distortions that Conservative Members continue to pour out are put straight. You need to be corrected on another element—

Mr. Deputy Speaker: Order. No one needs to correct me on the history of the electrical trade unions.

Mr. Best: I wanted to say that the virtues of the postal ballot are not all that the hon. Gentleman claimed. Postal ballots can be manipulated, and I was a victim of such manipulation—1,800 ballot papers ended up at the address of one employer, so that the members of the trade union could vote in the comfort of the employer's offices.

Dr. Lewis: I thank the hon. Gentleman for his intervention. With all due respect to his no doubt heroic part in rescuing the ETU, I say that, if we are to give plaudits, we should do so to people such as the late Sir Leslie Cannon, who led that fight. There is no reason to deny the crucial role played by Woodrow Wyatt, whose investigations as a "Panorama" reporter made it possible for people such as, I trust, the hon. Gentleman and, certainly, the late Sir Les Cannon to bring their campaign into the open and eventually to win their court case.
The hon. Gentleman is right to say that postal ballots can be rigged. Much of the ballot rigging in the ETU occurred despite the postal vote, which is why I said that postal ballots must be tamper-proof and independent.

Mr. McDonnell: The hon. Gentleman asked about the Noon workers; they have requested an independent ballot, in whatever form is acceptable to the majority and to the employer, on recognition. The dispute is one of the most bitter in west London—it is souring the whole community, and affects the most vulnerable section of that community. I ask the hon. Gentleman and all hon. Members to urge the employer to resolve the dispute constructively, so that good community relations can be restored in the area.

Dr. Lewis: I take those remarks in the spirit in which they were meant, and I am happy to join the hon. Gentleman in urging constructive moves by both sides in any bitter dispute.
Even if the Minister for Small Firms, Trade and Industry cannot tell us today the Government's intentions on percentages—whether the percentage will be of all the work force or of all those voting—will she at least guarantee that any voting mechanism that is established will be tamper-proof, secret and by postal ballot?

Mr. Michael Clapham: I understand that I need not declare my interests, but I shall. I am currently a member of two trade unions. Before I was a Member of Parliament, I was both regional and national officer of a trade union, and I have worked for trade unions for almost 18 years.
We have heard much about trade unions from Conservative Members, and I certainly shall not go down the route suggested by the hon. Member for New Forest,


East (Dr. Lewis), who embarked on a union-bashing exercise and added nothing constructive to the debate. I tell him that two centuries of trade unionism in Britain have shown that trade unions are to the betterment of democracy—that argument is accepted by no less a person than Professor Galbraith, who regards trade unionism as a civilising influence. Implementation of trade union recognition will no doubt also be a civilising influence on the shop floor. Trade unions bring great benefits not only to their members, but, as has clearly been shown, to business. I shall expand on that point in a moment.
If we compare the last quarter of this century with the third quarter, we can see that there have been enormous changes in the industrial scene, arising from the different sizes of industrial units and privatisation. Those changes are well documented, and, although I shall have to skirt over them, I want to put straight the hon. Members for New Forest, East and for Blaby (Mr. Robathan) on the facts that they misconstrued.
We know that there has been a fall in trade union membership in the past 25 years, but that was brought about not by the implementation of Mrs. Thatcher's trade union legislation between 1980 and 1990, but primarily by unemployment. If Conservative Members had done a little research, they would have come across the evidence given to the Select Committee on Employment—it reported in 1995, I think—which stated that the reason for the fall in trade union membership was the decimation of industry caused by the Conservative Government. Between 1979 and 1994, the proportion of people employed in manufacturing industry fell from 31 to 20 per cent. People were displaced not because of trade union legislation, but because of the Conservative Government's policies.

Mr. Robathan: The hon. Gentleman is being somewhat disingenuous. As I understand it, trade union membership has fallen since 1979 by approximately 6 million, yet unemployment never rose much above 3 million or, at worst, 3.5 million—it is currently under 2 million—so I do not see how he can link those figures. Does he agree that people do not want to be members of trade unions in the way they used to, because times have changed? People certainly do not want membership to be compulsory.

Mr. Clapham: On the hon. Gentleman's first point, trade union membership is well above 6 million. I accept that there has been a considerable fall, but, as I said, that was caused by unemployment. He said that, under Mrs. Thatcher's Government, unemployment was 3 million. Because of the way in which unemployment was hidden at that time, the actual figure was well above 5 million. The hon. Gentleman knows that as well as I do.
There is no evidence to suggest that individualism has taken over from organisation in trade unions. From 1987, 40 per cent. of the factories that derecognised trade unions did not put in place any alternative mechanism for communicating with the workers, who have been made that much worse off.
The Tory Government's attitude resulted in companies derecognising. The evidence shows clearly that that created bad management. Workplaces were managed in a way that had a detrimental impact on the economy and was unhelpful to the people on the shop floor.
Bad management leads to bad health and safety; the figures show that 1.6 million people are injured in industry each year. It is estimated that 2 million people are exposed to conditions that make their health worse. The cost is enormous: about 30 million working days a year are lost through poor health and safety, and the cost to the economy is estimated to be between £15 billion and £18 billion.
One of the major benefits of recognition will be the extension of the appointment of safety representatives under the Health and Safety at Work, etc. Act 1974. Hon. Members may be aware that there is a statutory obligation on the employer, where there is a recognised trade union, to set up a safety committee, through which the safety representative can work to ensure that the workplace is made much safer.
Hon. Members have referred to the jobs situation in their various constituencies. Across the Barnsley borough, which contains three constituencies, we need 19,000 jobs merely to bring employment up to the national average. That is because of the massive colliery closure programme that was imposed on the area with no thought whatever for the future.
The local authority, with help from the Labour Government, is working hard to overcome the enormous obstacles that we have to face in the local economy.

Mr. John Hayes: I have no prejudice against trade unions: my grandfather was a shop steward and my father was a union member all his life. The hon. Gentleman spoke about the Government's support for the coalfield communities. I am a former Nottinghamshire county councillor, and I know that the shire county rate support grant received by counties such as Nottingham was extremely poor. The money was channelled into urban areas, and not into coalfield communities.

Mr. Clapham: I refer the hon. Gentleman to The Guardian this morning. He will note that the Government are prepared and determined to do something for the coal industry, which the previous Tory Government were not. He should take cognisance of reports in the press this morning.
Because of the general depression in the local economy, wages in the Barnsley borough are only 50 per cent. of the national average. When I met some young people recently, a young woman told me that she was working at a Barnsley factory for £2.80 an hour; that she was forced to work a 12-hour day, because if she refused to work beyond eight hours she would lose her job; that she was not paid overtime; and that, when her first eight hours finished, she was bussed to another factory to complete the latter part of the 12-hour shift.
From what Conservative Members have said, I take it that they would be in favour of such a system and of wages of £2.80 an hour. The situation needs to be remedied, and that will happen only if unions are recognised and can negotiate the best possible wages and conditions for those on the shop floor. In such negotiations, they can move the employer on to partnership by consent. Partnership is better for everyone.
The evidence from my constituency shows clearly that 18 years of Toryism returned us to the Victorian age. The Government are determined to move us on, and trade union recognition is one way of returning empowerment and giving people a greater say, so that they can work in better conditions.
The 15 countries in the European Union all recognise trade unions in one way or another. The three Scandinavian countries—Sweden, Denmark and Finland—have had the kind of trade union recognition that we are discussing in situ for many years, and it is working well.

Mr. Bercow: The hon. Gentleman has just conceded that he would like to return to a pre-1979 position. From 1979, there was a consistent reduction in the number of days lost through strikes, and, by 1996, almost 28 million working days were saved. Does he concede that compulsory union recognition, which he favours, will create a persistent and substantial increase in the number of days lost in British workplaces?

Mr. Clapham: Had the hon. Gentleman been listening, he would have known that I was advocating not a return to pre-1979 but trade unionism in the modern age, which will give people the representation that they need to have a say in their workplace, leading to consent and partnership.
There has been a long dialogue about the formula between the TUC and the CBI, but they have been unable to bridge the gulf. If the formula proposed by the CBI were accepted, it would lead to an industrial relations crisis. The only formula that would work safely is 50 per cent. plus one, which would result in trade unions being recognised in an orderly way.

Mr. Collins: Will the hon. Gentleman give way?

Mr. Clapham: Not at this time, as I have not finished making the point. I want to explain why anything less than a 50 per cent. plus one formula would lead to crisis. The first time that the inevitable confrontation between employers and employees occurred, the employer would say that the conciliation and consultation procedures under which the trade union was prosecuting its claim no longer applied, because they had not been validated under the new rules. The result would be that employers would start to unravel the conciliation and consultation procedures. In some circumstances, it could lead to national, regional and local bargaining procedures being unravelled. That would be to the detriment not only of trade unions but of businesses.

Mr. Collins: The hon. Gentleman puts a most sincere and eloquent case against the CBI position. May I take it that, if his Government embraced the CBI position, he would vote against them?

Mr. Clapham: I believe that the TUC position is based on reason and fairness.
Trade unions are as relevant today as they ever were, because workers are as vulnerable as they ever were. The way to deal with that vulnerability is through trade union recognition. The way to implement that is via the TUC formula.

Mr. Tim Boswell: This has been a revealing debate, opened by the honourable and socialist Member for Makerfield (Mr. McCartney). In his characteristic way, after getting unsteadily into the air, he slipped the controls into auto-rant, and stayed there until he finished; so much so that, when he was asked the central question about whether the Government would adopt the position of the TUC or of the CBI, which are incompatible, he described it as a silly question. Some of his colleagues have definite views on it, but he could not answer it. If he has put his controls on autopilot, I hope that they do not fall foul of the millennium bug. It may be triggered well before the millennium, because even this Government will have to make a decision before then.
We had solid, thoughtful contributions from my hon. Friends the Members for Worthing, West (Mr. Bottomley), for Blaby (Mr. Robathan) and for New Forest, East (Dr. Lewis). They pointed out some of the historic record, and some of the constraints on this area of industrial relations. We had an interesting contribution from the hon. Member for Eastleigh (Mr. Chidgey) about the experience of the Advisory, Conciliation and Arbitration Service in picking up the pieces after the last episode of statutory recognition of unions.
We had some most revealing contributions from Labour Members. They may deny it if they wish, but the hon. Member for Bradford, South (Mr. Sutcliffe) took the TUC's part, and the hon. Member for City of Durham (Mr. Steinberg) did so explicitly. The hon. Member for Brentford and Isleworth (Ann Keen) leaned that way, and the hon. Member for Barnsley, West and Penistone (Mr. Clapham) was a bit that way inclined. Given the present state of the Labour party, I cannot help feeling that the situation is like that shown by the opinion poll once carried out in the staffroom of a well-known school. Twelve male teachers denied wearing long johns, three admitted it, and three did not know.
If Labour Members were not mindful of the Speaker's views on audible pagers, the air would have been thick with wireless messages bringing them back on message. If we had the compression of time that is a characteristic of the theatre, and this was a play, it would be now that we got the final revelation: a pager message vibrating across the thighs of Labour Members saying, "Jump TUC" or "Jump CBI". Then we would know.
This is a defining moment for the Government. Sources as varied as Peter Riddell of The Times and Bill Morris of the T and G have made that clear. As
a Minister who still hopes Blair will shift
is quoted as saying in the New Statesman:
It would be a defining moment that sent out ripples and echoes for a very long time in all sorts of unpredictable ways.
In the preceding paragraph,
a union leader with impeccable new Labour credentials
is quoted as threatening:
We would go into internal opposition.
Let me repeat in full Labour's election's pledge:
People should be free to join or not to join a union. Where they do decide to join, and where a majority of the relevant workforce vote in a ballot for the union to represent them, the union should be recognised. This promotes stable and orderly industrial relations. There will be full consultation on the most effective means of implementing this proposal.
It could hardly be clearer. It was clear to John Edmonds, Bill Morris and John Monks. However, last week, in reply to the hon. Member for Bolsover (Mr. Skinner), the Prime Minister said that he was consulting not on the means of implementation but on the meaning of his pledge. He finds preaching easy but decision making distressing. We concede that consultation is a good idea, but we begin to doubt whether we can get from the Prime Minister the time of day or the day of the week without still more consultation and delay, and no doubt the employment of yet more expensive focus groups.

Mr. Sutcliffe: On consultation, did the hon. Gentleman consult the CBI about this debate, and if so, what was its view on whether it would be helpful?

Mr. Boswell: I took advice from a variety of sources on that matter. It would be useful for the House, which makes decisions on legislation, to be told the Government's position. The hon. Gentleman may be ahead of me, but we seek to find out the truth.
The truth is that, if the Prime Minister ever found the time, or had the inclination, to come here, he would find staked out waiting for him, all wanting their pound of flesh, a group of Cabinet Ministers. Yesterday's newspapers reported it as including the Chancellor of the Exchequer, the Foreign Secretary and the President of the Board of Trade, who has not returned for the winding-up speeches; doubtless she hovers. It also includes the Secretaries of State for Health and for Culture, Media and Sport and, bless me, the Deputy Prime Minister.
There is also a concatenation of the newer intake. I strain my eyes to see the hon. Members for Brighton, Kemptown (Dr. Turner), for Leeds, North-East (Mr. Hamilton) and for Bradford, West (Mr. Singh), who were all fingered in the Sunday newspapers. The hon. Member for Upminster (Mr. Darvill) was here for most of the debate as a silent onlooker.
The truth is that, in its manifesto, Labour tried, in this as in many other matters, to be all things to all people. It consciously adopted a studied form of ambiguity, but cannot sustain it, even if it means that it has to give up some of its new-found friends or its old ones. Labour likes preaching at us. It is full of new puritanism, but it must know that its sins will catch it out. The day of judgment is fast approaching.
Meanwhile, No. 10 goes on with its ridiculous, unattributable waffle, trying to split the difference. A source close to the Prime Minister is reported as saying:
Both sides of industry will be disappointed. Neither will get what it wants. But it will be a new Labour solution, not an old Labour one.
Conservative Members are not disposed to back any solution to Labour's little local difficulties. Our motion was tabled in the interests of finding out what Labour thought it meant, thus providing a service to freedom of information. We are, sadly, little wiser, but we know that, if it is forced to decide—and it will be—it has a clear choice between 100 years of Labour history or upsetting its new associates in the business community. More

likely, it will have to try to broker a sordid compromise, described so characteristically and aptly as a "new Labour solution".
The House must remember that any compromise brings its own problems. As the TUC pointed out, in a work force of 100, if there is a minimum turnout requirement of 60 per cent. and a vote of 58 to one in favour, it will not count. If it is 31 to 29, it will. That is the situation that we will get into.
Possibly in an effort to put us off our stroke, one or two hon. Members started to raise matters of interest, so I can disclose to the House that I am the employer of one employee. There is no specific exclusion in the Labour manifesto for single employees.
I have not the faintest idea whether my employee is a member of a union, but those circumstances would provide a perfect opportunity for Labour's policy, because it would be possible to know whether one constituted a majority and whether the whole of the relevant work force was balloted on the matter. I mention that as an absurdity, because the view from the Conservative Benches is that it is far better not to go down that road at all.
Let us not imagine that the practical problems end there. As the Engineering Employers Federation has indicated, for a start many people join a union for the specific purpose of getting insured. We are familiar with that from the teachers' unions, but there are other examples. Are those people, willy-nilly, to have their bargaining rights fully collectivised? Are they to find that they have, in effect, joined a closed shop without being asked? Would an individual be able to make his own contract with his employer, or would such a contract be nullified? Would employers be able to communicate with the work force outwith the collective bargaining process?
There may also be difficulties where multiple unions are recognised, which would bear closely on the definition of the relevant work force. Different parts of an organisation might vote for different unions, and so take us back to the uncomfortable but familiar days of demarcation disputes and unnecessary industrial disputes. Who is to draw up the definition of the "relevant" part of the work force?
A pledge that Labour tried to pretend was clear was in fact intended to be a masterpiece of ambiguity—I forget who it was who said that there were six different sorts of ambiguity, but no doubt one of my literary friends will remind me—and it is extremely difficult to implement.

Mr. Robathan: I hate to disappoint my hon. Friend, but I do not know about the six sorts of ambiguity, although there is one specific sort of ambiguity about which I want to know. Does my hon. Friend believe that those who criticised Rupert Murdoch's behaviour at Wapping in the early 1980s will criticise such behaviour today, given that Rupert Murdoch is, metaphorically speaking, in bed with the Prime Minister and the Labour party?

Mr. Boswell: The short answer to that is that it all depends on the pager message they receive.
The Government amendment is particularly revealing, in that it makes it clear that they regard the matter as a sort of partnership agenda. There has been lots of touchy-feeliness and niceness emerging, which would not sit very well in the world of Jack Dash and Red Robbo. 


However, Labour's idea of industrial partnership has about as much relevance to real industrial partnership as people's democracy had to its real equivalent—a forced partnership is no partnership at all.
The CBI, in the shape of Adair Turner, has called for a real partnership. I would welcome that, just as I have no problem with the concept of trade union membership. The hon. Member for Liverpool, Garston (Maria Eagle) may be interested in this point, because it may have been in the back of her mind when she spoke.
Only this weekend, The Observer drew attention in a positive way to the health and safety record of certain companies where there was recognition, and there is probably some evidence of that sort of positive achievement. However, if it is in the real interests of employers to recognise unions, why do they not recognise them anyway? Why should employers be forced by law to recognise unions? When one brings law into all such areas, the danger is that it will merely reignite the industrial relations problems we had hoped were long behind us.

Maria Eagle: Will the hon. Gentleman remind the House who brought law into industrial relations in this country?

Mr. Boswell: It was not, of course, a Conservative Government. The immunities go back to 1909, and the problem has always been to find the right balance.
It is well known that the number of strikes today is less than 10 per cent. of the figure characteristic of the 1970s. ACAS has just published a good report on industrial relations for the year. However, the strains are already being felt: for example, last week we had irregular action in the postal service and the London Underground, and there was a walkout after a suspension at my local Ford plant. There is real pressure on certain industrial sectors, and it is vital that we do not throw away our competitive strengths. The danger is that the effect of the Government's policy will be to sling another rock at British industry, at a time when it can least afford it.
The Labour manifesto spoke of
stable and orderly industrial relations.
However, the danger is well set out by the director-general of the Institute of Personnel Development, who says:
This is a very good illustration of the sort of irreconcilable nonsense that arises from statutory trade union recognition. The obligation becomes a source of conflict in itself.
Our motion probes the Government's intentions, because we fear that they will not deliver stability. We believe that their policies caricature industrial partnership and disturb a delicate industrial balance. At their heart is an ambiguity which the Government know exists, but they cannot go on for ever on the basis of, "Don't ask, don't tell." They will have to stand up and be counted, and Labour Back Benchers could make a contribution by joining us in the Lobby tonight.

The Minister for Small Firms, Trade and Industry (Mrs. Barbara Roche): This has been an interesting debate and a revealing one, because it has said a great deal about today's Conservative party. What it shows is the reason why they are still yesterday's Conservative party,

and will remain so. Although the debate has been interesting, it obviously has not been interesting enough to attract Conservative Members to the Chamber on their own Opposition day. At one point during the opening speeches, there were about 14 Opposition Members present. I know that the number of Conservative Members is small, but I had not realised that they were so small or so pathetic.
As my hon. Friend the Minister of State said, the Government will produce proposals on union recognition in the first half of this year. Of course, important decisions are to be taken on the details of those proposals, and we are actively engaged in discussions on those issues with both the CBI and the TUC.
There have been two strands to the debate: there are those hon. Members, especially on the Labour Benches, who wish to engage in a genuine debate about the future direction of policy, and we have heard thoughtful and valuable contributions on the balance to be struck between rights and responsibilities of employees and employees, and descriptions of modern business and modern trade unionism.
In that strand, there is a common realisation that the existing balance—or, more precisely, the balance as at 1 May last year—is inadequate. It palpably fails to provide fairness; it fails to deliver a sense of security and mutual trust in the workplace; it also fails to encourage workers to see themselves as partners with employers in pursuit of common business objectives.
That is what this subject is all about—building competitiveness, and an economy in which we can all share. We want to establish a new era of employment relations in this country. We want to break with the past, both from the time when workers and management were constantly at loggerheads, and from the more recent period when many workers have been denied decent standards at work. Our approach is truly a third way. It is designed to achieve flexibility with fairness, enhanced competitiveness with more security, and greater productivity through partnership.

Mr. Lansley: In the absence of a formed Government policy on union recognition, and instead of waiting for a White Paper and talking to the CBI and the TUC, why do the Government not publish a Green Paper and have a wider consultation with industry more generally?

Mrs. Roche: I am trying to follow the hon. Gentleman's argument, but I honestly fail to do so. In our manifesto, we said that we would consult. What sticks in the Conservatives' craw is that the Labour Government really do consult with industry—we consult with unions and with management. I remind Conservative Members that that is what we said in our manifesto we would do, it is what the British people elected us to do and it is what we shall do, and we shall not be diverted from it.

Mr. Boswell: The hon. Lady was right to say that that was in the Labour party manifesto. Will she now tell the House, without consulting or conferring, what it means? We want a simple answer.

Mrs. Roche: The hon. Gentleman clearly does not want consultation. Conservative Members like the old days—they like remembering divisions in industry. They cannot stand the fact that we have consulted the C131


and the TUC, which have got together to produce joint documents. It sticks in their craw. They will have to wait for the White Paper and until we have listened to what both sides have to say.
Not for the first time, Conservative Members simply refuse to move with the times. They are in a state of denial. They cannot bear to think of the election result, or to adjust their thinking. They fail to grasp the fact that modern companies need to work in collaboration and partnership with their employees. Managing people by threat or diktat does not produce efficient or profitable business. The intervention and speech of the hon. Member for Daventry (Mr. Boswell) are good examples of that.
As my hon. Friends said time and again, our leading firms fully grasp that point. Unlike the Conservative party, most companies already recognise unions and value the importance of establishing constructive, collective relationships with their work forces.
My hon. Friend the Member for Bradford, South (Mr. Sutcliffe) rightly referred to the recent NOP survey on behalf of the consultancy People in Business, which found that 67 per cent. of managers in top companies thought that good collective relationships were "important" or "very important" in implementing change at the workplace. That is an important message, but Conservative Members could not care less. They want to return to the past instead of looking to the future.
As my hon. Friend the Member for Brentford and Isleworth (Ann Keen) said, we want partnership rather than an adversarial relationship. The TUC and the CBI are working together to achieve that. It is all about progressive businesses and modern companies with modern trade unions.
Our task is to spread good practice beyond the leading companies, and we know that much remains to be done. We need to ensure that as many companies as possible take that message on board. If we believed Conservative Members, we would think that all was well in the best possible world, and that everything could continue as before. We would think that we had nothing to learn and did not need to progress. We reject that.

Mr. Collins: The Minister says that the Government's task is to spread the word beyond the leading firms. Is she in favour of a minimum number of employees, above which recognition proposals would apply and below which they would not apply? If so, what would the number be?

Mrs. Roche: Although the hon. Gentleman has been present throughout the debate, he clearly did not listen to the Minister of State's opening speech. We are listening and consulting, and we shall introduce our proposals in the White Paper in our time, not in the hon. Gentleman's.

Several hon. Members: rose—

Mrs. Roche: I must make progress, but, as the hon. Member for Maidenhead (Mrs. May) is my pair, I always give way to her.

Mrs. Theresa May: I, too, am conscious of the relationship between us, so I shall be careful what I say. The Minister referred again to consultation. When she stood on the Labour party manifesto in last year's election, what did she understand was the definition of "the majority of the work force"?

Mrs. Roche: I appreciate the courtesy with which the hon. Lady has framed her question. I understood from the manifesto, on which my hon. Friends and I stood and on which we were successful, that we would carry out a consultation exercise and then make proposals—[Interruption.] Conservative Members may not like that. They cannot stand the fact that we are not only consulting but listening. They left us with a fractured legacy, and we shall ensure that we deal with it.
It is asserted that workers do not need or want union recognition, but prefer to deal with their employers on an individual basis. We know that that is incorrect. According to the latest British social attitudes survey, 46 per cent. of workers feel that they should have more say at work, 62 per cent. think that management always try to get the better of employees, and 63 per cent. feel that they have little or no influence over decisions that directly affect their work. [Interruption.]
Opposition Members think that that is amusing. They think that it is great for the state of British industry. It is fine for them to be complacent, but the Government want to change things, so that every worker feels involved in the company that he or she represents, and so that management and unions can progress together to help the productiveness of our economy.
This afternoon, we heard speeches that took us back in time. The hon. Member for New Forest, East (Dr. Lewis) was the authentic voice of the Tory Opposition. [HON. MEMBERS: "Hear, hear."] I am glad that my analysis is correct, and that the hon. Gentleman is isolated. if his really is the voice of the Tory party, this Government are in power for a very long time.

Dr. Julian Lewis: The Minister thinks that I am going to respond to her facile remark, but I am not. I wish to raise a serious point. Will she answer the question posed repeatedly in my speech: can the Government guarantee that, whatever figures they finally light upon in terms of the number of people who must vote for recognition to be made mandatory, the vote will be conducted by a tamper-proof, secret postal ballot? Yes or no?

Mrs. Roche: I should caution the hon. Gentleman to be a little more patient. I assure him that recognition ballots, like industrial action ballots, will be fairly conducted and subject to independent scrutiny. That has come about because of the joint work between the CBI and the TUC. Conservative Members may knock it, but we recognise that it is productive and extremely useful.
Our proposals will reduce the scope for disputes over recognition. At present, unions have only two options if an employer refuses to recognise them: they can give in, or they can take industrial action. A statutory recognition procedure provides a potent alternative for both unions and employers to test the support for recognition, and to resolve disputes without industrial action.
I was a little disappointed by the speech of the hon. Member for Eastleigh (Mr. Chidgey), because he seemed to suggest that we were wrong to ask the TUC and the CBI to discuss those issues bilaterally. I thought that that was what the Liberal Democrats stood for, and that they were keen on industrial partnership. The Government believe in partnership, and want to deliver our policy in conjunction with all interested parties.
The Government have listened closely to the views expressed in today's debate, and we shall reflect carefully on what has been said. The White Paper's aim is to present a package of measures that will guarantee decent minimum standards at work. The standards must be sensible, realistic and fair to both employees and employers.
Our proposals on fairness therefore need to be clear, and as simple as possible to implement. We must end the situation in which employers can ignore the wishes of their work force by denying recognition, even though most of their employees clearly want it. At the moment, the power to determine whether recognition is granted rests solely with employers. Workers have no rights or say in the matter. Those arrangements cannot continue.
There are solid democratic arguments in favour of establishing a recognition right. As my hon. Friends the Members for Barnsley, West and Penistone and for City of Durham (Mr. Steinberg) said, it also makes good economic sense. My hon. Friend the Member for Barnsley, West and Penistone spoke about health and safety issues as well.
How can commitment and flexibility be encouraged, when employers ignore the views of their employees on such a fundamental issue as establishing a collective voice at work? Clearly we need to move on, and ensure that we progress.
We have already done much in our first year in office to create a more just system of employment relations. We are close to enacting the National Minimum Wage Bill. We have signed the social chapter, and are about to set out our proposals for implementing the working time and young workers directives. The forthcoming White Paper on fairness at work will contain our proposals for completing the process.
Every one of these proposals is resisted by Opposition Members, who have nothing to offer the future. They are stuck firmly in the past, in an age of distrust, insecurity and conflict at work. They talk about the need for businesses to work more flexibly, but, as this revealing debate has shown, it is they and their thinking that are inflexible and outdated.
Our objective is to create a new and modern system of employment relations in this country—a system in which fairness can truly be combined with flexibility and efficiency; a system that actively encourages a greater sense of trust and partnership in the workplace.
I urge the House to support the amendment standing in the name of my right hon. Friends.

Question put, That the original words stand part of the Question:—

The House divided: Ayes 129, Noes 316.

Division No. 244]
[7.1 pm


AYES


Ainsworth, Peter (E Surrey)
Jenkin, Bernard


Amess, David
Johnson Smith,


Ancram, Rt Hon Michael
Rt Hon Sir Geoffrey


Arbuthnot, James
Key, Robert


Atkinson, David (Bour'mth E)
King, Rt Hon Tom (Bridgwater)


Atkinson, Peter (Hexham)
Laing, Mrs Eleanor


Baldry, Tony
Lait, Mrs Jacqui


Bercow, John
Lansley, Andrew


Beresford, Sir Paul
Leigh, Edward


Blunt, Crispin
Letwin, Oliver


Body, Sir Richard
Lewis, Dr Julian (New Forest E)


Boswell, Tim
Lidington, David


Bottomley, Peter (Worthing W)
Loughton, Tim


Bottomley, Rt Hon Mrs Virginia
Luff, Peter


Brady, Graham
Lyell, Rt Hon Sir Nicholas


Brazier, Julian
MacGregor, Rt Hon John


Brooke, Rt Hon Peter
McIntosh, Miss Anne


Browning, Mrs Angela
Maclean, Rt Hon David


Bruce, Ian (S Dorset)
McLoughlin, Patrick


Burns, Simon
Major, Rt Hon John


Butterfill, John
Mawhinney, Rt Hon Sir Brian


Cash, William
May, Mrs Theresa


Chapman, Sir Sydney
Nicholls, Patrick


(Chipping Barnet)
Ottaway, Richard


Chope, Christopher
Page, Richard


Clappison, James
Paice, James


Clark, Rt Hon Alan (Kensington)
Paterson, Owen


Clark, Dr Michael (Rayleigh)
Prior, David


Clarke, Rt Hon Kenneth
Randall, John


(Rushcliffe)
Redwood, Rt Hon John


Clifton-Brown, Geoffrey
Robathan, Andrew


Collins, Tim
Robertson, Laurence (Tewk'b'ry)


Colvin, Michael
Roe, Mrs Marion (Broxbourne)


Cormack, Sir Patrick
Rowe, Andrew (Faversham)


Cran, James
St Aubyn, Nick


Davis, Rt Hon David (Haltemprice)
Sayeed, Jonathan


Day, Stephen
Shephard, Rt Hon Mrs Gillian


Dorrell, Rt Hon Stephen
Shepherd, Richard


Duncan, Alan
Simpson, Keith (Mid-Norfolk)


Emery, Rt Hon Sir Peter
Soames, Nicholas


Faber, David
Spring, Richard


Fabricant, Michael
Stanley, Rt Hon Sir John


Fallon, Michael
Steen, Anthony
 

Flight, Howard
Streeter, Gary


Forth, Rt Hon Eric
Swayne, Desmond


Fowler, Rt Hon Sir Norman
Syms, Robert


Fraser, Christopher
Tapsell, Sir Peter


Gale, Roger
Taylor, Ian (Esher & Walton)


Garnier, Edward
Townend, John


Gibb, Nick
Tredinnick, David


Gillan, Mrs Cheryl
Trend, Michael


Gorman, Mrs Teresa
Tyrie, Andrew


Green, Damian
Viggers, Peter


Greenway, John
Walter, Robert


Grieve, Dominic
Wardle, Charles


Hamilton, Rt Hon Sir Archie
Waterson, Nigel


Hammond, Philip
Wells, Bowen


Hawkins, Nick
Whitney, Sir Raymond


Hayes, John
Widdecombe, Rt Hon Miss Ann


Heald, Oliver
Wilkinson, John


Heathcoat-Amory, Rt Hon David
Willetts, David


Hogg, Rt Hon Douglas
Winterton, Mrs Ann (Congleton)



Horam, John
Yeo, Tim


Howard, Rt Hon Michael
Young, Rt Hon Sir George


Howarth, Gerald (Aldershot)



Hunter, Andrew
Tellers for the Ayes:


Jack, Rt Hon Michael
Mr. John M. Taylor and


Jackson, Robert (Wantage)
Sir David Madel.






NOES


Adams, Mrs Irene (Paisley N)
Cunningham, Rt Hon Dr John


Ainger, Nick
(Copeland)


Ainsworth, Robert (Cov'try NE)
Cunningham, Jim (Cov'try S)


Alexander, Douglas
Dafis, Cynog


Allen, Graham
Dalyell, Tam


Anderson, Janet (Rossendale)
Darling, Rt Hon Alistair


Armstrong, Ms Hilary
Darvill, Keith


Atherton, Ms Candy
Davey, Valerie (Bristol W)


Atkins, Charlotte
Davies, Rt Hon Denzil (Llanelli)


Austin, John
Davies, Geraint (Croydon C)


Banks, Tony
Davis, Terry (B'ham Hodge H)


Barnes, Harry
Dean, Mrs Janet


Battle, John
Denham, John


Beard, Nigel
Dewar, Rt Hon Donald


Beckett, Rt Hon Mrs Margaret
Dismore, Andrew


Begg, Miss Anne
Dobbin, Jim



Bell, Martin (Tatton)
Dobson, Rt Hon Frank


Bell, Stuart (Middlesbrough)
Donohoe, Brian H


Benn, Rt Hon Tony
Doran, Frank


Bennett, Andrew F
Dowd, Jim


Benton, Joe
Drew, David


Bermingham, Gerald
Dunwoody, Mrs Gwyneth


Berry, Roger
Eagle, Maria (L'pool Garston)


Best, Harold
Edwards, Huw


Betts, Clive
Ellman, Mrs Louise


Blears, Ms Hazel
Ennis, Jeff


Blizzard, Bob
Fatchett, Derek


Boateng, Paul
Field, Rt Hon Frank


Bradley, Keith (Withington)
Fitzpatrick, Jim


Bradshaw, Ben
Fitzsimons, Lorna


Brinton, Mrs Helen
Follett, Barbara


Brown, Rt Hon Gordon
Forsythe, Clifford


(Dunfermline E)
Foster, Rt Hon Derek


Brown, Rt Hon Nick (Newcastle E)
Foster, Michael Jabez (Hastings)


Brown, Russell (Dumfries)
Foster, Michael J (Worcester)


Browne, Desmond
Foulkes, George


Burden, Richard
Galbraith, Sam


Burgon, Colin
Galloway, George


Butler, Mrs Christine
Gardiner, Barry


Byers, Stephen
George, Bruce (Walsall S)


Caborn, Richard
Gerrard, Neil


Campbell, Alan (Tynemouth)
Gilroy, Mrs Linda


Campbell, Mrs Anne (C'bridge)
Godman, Dr Norman A


Campbell, Ronnie (Blyth V)
Godsiff, Roger


Campbell—Savours, Dale
Goggins, Paul


Canavan, Dennis
Golding, Mrs Llin


Cann, Jamie
Gordon, Mrs Eileen


Caplin, Ivor
Griffiths, Nigel (Edinburgh S)


Casale, Roger
Griffiths, Win (Bridgend)


Caton, Martin
Grocott, Bruce


Chapman, Ben (Wirral S)
Grogan, John


Chisholm, Malcolm
Hall, Mike (Weaver Vale)


Church, Ms Judith
Hall, Patrick (Bedford)


Clapham, Michael
Hamilton, Fabian (Leeds NE)


Clark, Rt Hon Dr David (S Shields)
Hanson, David


Clark, Dr Lynda
Harman, Rt Hon Ms Harriet


(Edinburgh Pentlands)
Heal, Mrs Sylvia


Clark, Paul (Gillingham)
Henderson, Doug (Newcastle N)


Clarke, Eric (Midlothian)
Henderson, Ivan (Harwich)


Clarke, Rt Hon Tom (Coatbridge)
Hepburn, Stephen


Clwyd, Ann
Heppell, John


Coaker, Vernon
Hesford, Stephen


Coffey, Ms Ann
Hewitt, Ms Patricia


Cohen, Harry
Hill, Keith


Coleman, Iain
Hoey, Kate


Connarty, Michael
Hoon, Geoffrey


Cook, Frank (Stockton N)
Hope, Phil


Cooper, Yvette
Hopkins, Kelvin


Corbyn, Jeremy
Howarth, Alan (Newport E)


Cranston, Ross
Howarth, George (Knowsley N)


Crausby, David
Howells, Dr Kim


Cryer, Mrs Ann (Keighley)
Hoyle, Lindsay


Cummings, John
Hughes, Ms Beverley (Stretford)


Cunliffe, Lawrence
Hughes, Kevin (Doncaster N)





Humble, Mrs Joan
Murphy, Denis (Wansbeck)


Hurst, Alan
Murphy, Jim (Eastwood)


Hutton, John
Norris, Dan


Iddon, Dr Brian
O'Brien, Bill (Normanton)


Illsley, Eric
O'Hara, Eddie


Jackson, Ms Glenda (Hampstead)
Olner, Bill


Jackson, Helen (Hillsborough)
O'Neill, Martin


Jamieson, David
Organ, Mrs Diana


Jenkins, Brian
Palmer, Dr Nick


Johnson, Alan (Hull W & Hessle)
Pearson, Ian


Jones, Barry (Alyn & Deeside)
Pendry, Tom


Jones, Mrs Fiona (Newark)
Perham, Ms Linda


Jones, Dr Lynne (Selly Oak)
Pickthall, Colin


Jones, Martyn (Clwyd S)
Pike, Peter L


Jowell, Ms Tessa
Plaskitt, James


Kaufman, Rt Hon Gerald
Pope, Greg


Keeble, Ms Sally
Pound, Stephen


Keen, Alan (Feltham & Heston)
Powell, Sir Raymond


Keen, Ann (Brentford & Isleworth)
Prentice, Ms Bridget (Lewisham E)



Kemp, Fraser
Prentice, Gordon (Pendle)


Kennedy, Jane (Wavertree)
Prescott, Rt Hon John


Khabra, Piara S
Primarolo, Dawn


Kilfoyle, Peter
Quin, Ms Joyce


King, Ms Oona (Bethnal Green)
Quinn, Lawrie


Kingham, Ms Tess
Rapson, Syd


Kumar, Dr Ashok
Raynsford, Nick


Laxton, Bob
Reed, Andrew (Loughborough)


Lepper, David
Reid, Dr John (Hamilton N)


Leslie, Christopher
Robertson, Rt Hon George


Levitt, Tom
(Hamilton S)


Lewis, Ivan (Bury S)
Roche, Mrs Barbara


Liddell, Mrs Helen
Rogers, Allan


Linton, Martin
Rooker, Jeff


Lloyd, Tony (Manchester C)
Rooney, Terry


Llwyd, Elfyn
Rowlands, Ted


Lock, David
Roy, Frank


Love, Andrew
Ruane, Chris


McAvoy, Thomas
Ruddock, Ms Joan


McCabe, Steve
Russell, Ms Christine (Chester)


McCafferty, Ms Chris
Ryan, Ms Joan


McCartney, Ian (Makerfield)
Salter, Martin


McDonagh, Siobhain
Savidge, Malcolm


McDonnell, John
Sawford, Phil


McFall, John
Sedgemore, Brian


McGuire, Mrs Anne
Sheerman, Barry


McIsaac, Shona
Sheldon, Rt Hon Robert


McKenna, Mrs Rosemary
Singh, Marsha


Mackinlay, Andrew
Skinner, Dennis


McNulty, Tony
Smith, Angela (Basildon)


MacShane, Denis
Smith, Jacqui (Redditch)


Mactaggart, Fiona
Smith, John (Glamorgan)


McWalter, Tony
Smith, Llew (Blaenau Gwent)


McWilliam, John
Snape, Peter


Mahon, Mrs Alice
Southworth, Ms Helen


Mallaber, Judy
Spellar, John


Marek, Dr John
Squire, Ms Rachel


Marsden, Gordon (Blackpool S)
Starkey, Dr Phyllis


Marsden, Paul (Shrewsbury)
Steinberg, Gerry


Marshall, Jim (Leicester S)
Stevenson, George


Marshall-Andrews, Robert
Stewart, David (Inverness E)


Martlew, Eric
Stinchcombe, Paul


Meacher, Rt Hon Michael
Stoate, Dr Howard


Meale, Alan
Stott, Roger


Michael, Alun
Stringer, Graham


Michie, Bill (Shef?ld Heeley)
Stuart, Ms Gisela


Milburn, Alan
Sutcliffe, Gerry


Mitchell, Austin
Taylor, Rt Hon Mrs Ann


Moffatt, Laura
(Dewsbury)


Moran, Ms Margaret
Taylor, Ms Dari (Stockton S)


Morgan, Rhodri (Cardiff W)
Thomas, Gareth R (Harrow W)


Morley, Elliot
Tipping, Paddy


Morris, Ms Estelle (B'ham Yardley)
Todd, Mark


Morris, Rt Hon John (Aberavon)
Touhig, Don


Mountford, Kali
Trickett, Jon


Mudie, George



Mullin, Chris







Truswell, Paul
Williams, Rt Hon Alan


Turner, Dennis (Wolverh'ton SE)
(Swansea W)


Turner, Dr Desmond (Kemptown)
Williams, Alan W (E Carmarthen)


Turner, Dr George (NW Norfolk)
Williams, Mrs Betty (Conwy)


Twigg, Derek (Halton)
Winnick, David


Twigg, Stephen (Enfield)
Winterton, Ms Rosie (Doncaster C)


Vaz, Keith
Wise, Audrey


Vis, Dr Rudi
Wood, Mike


Walley, Ms Joan
Woolas, Phil


Wareing, Robert N
Wright, Anthony D (Gt Yarmouth)


Watts, David
Tellers for the Noes:


Wicks, Malcolm
Mr. David Clelland and


Wigley, Rt Hon Dafydd
Mr. Jon Owen Jones.

Question accordingly negatived.

Question, That the proposed words be there added, put forthwith, pursuant to Standing Order No. 31 (Questions on amendments), and agreed to.

MR. DEPUTY SPEAKER forthwith declared the main Question, as amended, to be agreed to.

Resolved,

That this House congratulates the Government for acting quickly and effectively to redress the damaging culture of low pay, job insecurity and the sweatshop economy inherited from the previous Government by adopting a partnership approach to set decent minimum standards for all workers; notes that good standards at work are essential for competitiveness and business success and that the Government has, as part of its strategy for ensuring decent minimum standards and labour market flexibility, involved employers' and workers' representatives on the Low Pay Commission and in discussions on trade union recognition, and in addition has restored union rights at GCHQ, signed the European Social Chapter and made rapid progress on the National Minimum Wage Bill; and further notes that the Government is also committed, as part of that strategy, which enjoys wide support, to implementing the Directives on Working Time, Young Workers, European Works Councils and Part-Time Work, and to fulfilling the Government's commitment to enable workers to enjoy union recognition where a majority of the relevant workforce vote in a ballot for the union to represent them.

Manufacturing Industry

Mr. Deputy Speaker (Sir Alan Haselhurst): I must tell the House that Madam Speaker has selected the amendment tabled in the name of the Prime Minister.

Mr. John Redwood: I beg to move,
That this House notes the TUC forecast of 200,000 job losses in manufacturing resulting from this Government's economic policies, the fact that so many manufacturers have to make representations about export and trading problems, the absence of a stable and competitive exchange rate, the damage done by tax increases imposed on business and the forthcoming wage and labour relations problems coming from the Government's social and labour law agenda; and urges the Government to put the interests of manufacturing business higher up its agenda, changing policies before factories close and jobs are lost.
It gives me pleasure to speak to the Opposition motion, and to oppose the Government amendment.
Labour's policy is hurting, but it is not working. Manufacturing is being gravely damaged. Exporters are losing orders; industry is teetering on the edge of recession. Every day brings more bad news. Today's industrial output figures show a further drop in activity. ICI has forecast a £120 million profit collapse, thanks to the level of sterling. Vickers is experiencing difficulties in obtaining repeat export orders, thanks to the level of the pound. Royal Doulton has announced 330 job losses, and has blamed the exchange rate. British Steel has said that 10,000 jobs must go owing to the state of the currency. Last week, one of the nation's big caravan companies, ABI, went into receivership, blaming the impact of the pound.
Only a few weeks ago, the President of the Board of Trade went to the caravan exhibition. She told exhibitors there that she was their champion. Some champion! She should have noticed during her visit that Labour's policies for business were damaging. She should have found out that those people did not want all the extra taxes. She should have discovered that sterling was crippling their exports. She has done nothing about the problem, and today she owes the industry an apology and the House an explanation.
The President of the Board of Trade should explain why she has remained silent throughout the first stages of an industrial collapse, and she should tell us what she intends to do about the high level of the pound. I see that the right hon. Lady is frowning. I wonder whether she frowns because she is completely ignorant of the state of British manufacturing industry, or because she does not know what to do about it. It is no good exuding tea and sympathy, as some new Labour variant of beer and sandwiches. Industry expects the President of the Board of Trade to come up with some answers.

Mr. Barry Sheerman: My right hon. Friend the President of the Board of Trade is probably frowning at the cheapjack motion that we are discussing. Twenty years ago, under a Labour Government, 3.6 per cent. of gross domestic product was invested in plant and machinery—in industry. When the Conservatives left office last year, the figure was down to 2.6 per cent. Before that, it had been consistently hovering just above 2 per cent.—lower than the figure in any other industrial


nation. What does the right hon. Gentleman say about that record of 20 years of failing to help British manufacturing investment?

Mr. Redwood: During our 18 years in office, we gave manufacturing much more encouragement than the present Government have during the past 10 months. We did not tax manufacturing as this Government are; we did not try to wreck manufacturing by introducing an independent Bank of England, and fiscal policies of the kind introduced by this Government. The hon. Gentleman would be well advised to listen to manufacturers in his constituency, and to speak up for them in the House rather than accepting the brief on the pager and making foolish interventions.

Mr. Ivor Caplin: As the right hon. Gentleman has mentioned the Bank of England, perhaps he will tell us whether he thinks that the present Government's policy of independence would be reversed if there were ever another Tory Government.

Mr. Redwood: The hon. Gentleman may wish to note that the legislation concerned has not yet gone through the House, and that we oppose it. Indeed, the Chancellor has jumped the gun: he went ahead with the policy without notifying the House in the first instance, and then, having notified the House, went ahead without the necessary legal backing—backing that he is seeking. The Conservative party opposes that legislation.
As the hon. Gentleman knows, many foolish measures are going through the House, and many more may do so over the next couple of years. My right hon. Friends and I will decide which we can and should repeal when we get nearer to the time to write our manifesto. We may well be able to surprise the hon. Gentleman by giving him the answer that he thinks I cannot give tonight, but he must accept that it would be foolish for us to say at this stage what measures we shall repeal when so many more measures are likely to be presented by the Government.

Mr. Andrew Lansley: Did my right hon. Friend see the Chancellor of the Exchequer's Budget Red Book forecast that the rate of increase of business investment is set to halve between 1997 and 1999?

Mr. Redwood: My hon. Friend makes an extremely powerful point, to which I was coming. Of course investment is forecast to plummet under this Government, just as savings are going down. They are hitting savings and investment—the two usually go together—which is the opposite of what they said before the election they would achieve. Labour Members look so glum because they know that the Government are delivering exactly the opposite of the fine words that they offered industry in the run-up to the general election. Does the Secretary of State want to go down in history as a Labour Secretary of State who presided over factory closures, more short-time working and more job losses? That is what the TUC is predicting, let alone independent forecasters or Her Majesty's Opposition.
In the 1980s, a leading Labour commentator said:
The problems of our manufacturing industries remain, and in these circumstances can only get worse".
He added:
it is our ability to produce manufactured goods and to compete in our own and in world markets that is central to our industrial and economic performance.
Those words are quite right today, and I wish that they would be repeated—they were written by the commentator-turned-Chancellor who is now at No. 11 Downing street.
Will the Secretary of State remind the Chancellor of his fine words in opposition about how important manufacturing is to our economy? Will she find the strength, at least in the privacy of Government, to condemn the lethal combination of the past two Budgets and the independence of the Bank of England, which is forcing adjustment and the policy against inflation on to manufacturers? They will have to slim down or close down.
Before the election, the Prime Minister agreed with the Chancellor, but that was a long time ago, and we know that they have since bickered and fallen out. Before the election, the Prime Minister said:
Britain won't live by services alone. It needs a manufacturing base".
After the election, the Prime Minister—a rare visitor to the House—has done nothing to help manufacturing. He is deaf to the pleas of manufacturers about huge tax increases, about the level of sterling and about their having to close factories and go on to short time because of the export position.

Dr. Nick Palmer: I am a little puzzled by the right hon. Gentleman's remarks. He appears to be arguing simultaneously that taxes should go down to help industry and go up to help the pound. Which does he favour?

Mr. Redwood: It is a complete fiction for Labour Members to say that Conservative Members believe that taxes must go up. We believe that savings must go up. The way in which to promote savings is to cut taxes on them instead of putting more and more taxes on savers. That huge error of the past two Budgets was underwritten by the Chancellor's error in taking money out of the tills and cash registers of businesses.

Yvette Cooper: Is the right hon. Gentleman saying that he wants to cut taxes on saving and increase borrowing?

Mr. Redwood: I am saying that the economy would be much healthier if taxes on saving were cut and the tax breaks that we left the Government were restored. More natural tax revenue would come in without the increase in rates, which the Government have wrongly imposed. Higher tax rates are necessary if enough manufacturing is killed, which is what the Government are doing, because a generator of additional tax revenue is being destroyed. They are distorting the economy against their interests and against those of the nation.
Labour Members always make two replies when Conservative Members stick up for manufacturers.

Dr. George Turner: Will the right hon. Gentleman give way?

Mr. Redwood: I shall tell the hon. Gentleman what he is about to say, and he can think of something else. 


Labour Members tell us that we have no right to stick up for manufacturers because some businesses were damaged and jobs were lost in 1991 and 1992.

Fiona Mactaggart: Will the right hon. Gentleman give way?

Mr. Redwood: I shall make this point and then give way, as I always do.
Labour Members are right to say that mistakes were made in that period, and that damage was done. The Conservative party has apologised for those mistakes; more important, we have learnt from them.

The President of the Board of Trade and Secretary of State for Trade and Industry (Mrs. Margaret Beckett): When?

Mr. Redwood: The Leader of the Opposition made a fulsome apology for the exchange rate mechanism difficulties, from which the Conservative Government and this Government should have learnt. Unfortunately, this Government have not learnt from that experience, and have amnesia about the early 1990s. Over the Conservative years, that was the only time that I remember the Labour Opposition supporting the economic policies of the day. Why do not Labour Members apologise and show that they have learnt something from the experience? They are foolish to keep highlighting it.

Dr. George Turner: I am glad that the right hon. Gentleman publicly apologised for the industrial scars that he left in my constituency—factories in King's Lynn closed and have still not reopened. Does he recognise that, under this Government, we are experiencing the smack of a firm Chancellor who is determined that interest rates will not go to 15 per cent. and that saving rates will not go down to 6 per cent., which are the figures over which the right hon. Gentleman presided?

Mr. Redwood: That is a helpful intervention, because it illustrates the point: mistakes were made in the early 1990s and many factories have not reopened, which is why we say to the Government, "Don't let it happen again." Do the Government at least have the decency to accept that they fully supported those policies and have still not apologised or implied that they have learnt anything from that experience?

Fiona Mactaggart: I find it odd that the right hon. Gentleman is suggesting that what happened in the early 1990s was a tiny blip. Between the election of the Conservative Government in 1979 and the election of the Labour Government, manufacturing industry in Slough did not decline by only 5 or 10 per cent. By the time that I was elected, manufacturing industry in the town was a third of what it had been. That is the Tory legacy. Let us not pretend that there was a little blip at the beginning of the 1990s; there was devastation, and many people in towns such as Slough lost their livelihoods as a result.

Mr. Redwood: There were enormously successful economic conditions throughout most of the 1980s and after we came out of the exchange rate mechanism. In the Conservative years, the motor industry was restored to

some of its former glory after the devastation of the 1970s and the Labour Government. The figures that the hon. Lady produces for Slough are incredible. I know Slough fairly well; there was not a two-thirds decline in manufacturing activity over the Tory years. She should visit it more often; if she did so, she would realise that a large number of successful new-generation businesses came to the town and created considerable prosperity.

Mr. Andrew Reed: The right hon. Gentleman knows from the right hon. Member for Charnwood (Mr. Dorrell), who is sitting close by him, that Loughborough suffered throughout the 1980s. I can give him the job figures: a brush factory employed 6,500 people when the right hon. Member for Charnwood was elected in Loughborough in 1979. It was the largest employer in the town, but it now employs only 2,500 people. That is what happened in the 1980s, and I hope that the right hon. Gentleman will apologise to every one of those people who lost their jobs, whom I meet regularly on their doorsteps because I live in the constituency.

Mr. Redwood: I trust that the hon. Gentleman recognises the great advances made by Conservative policies in new industries such as communications, high technology and computing, which came to this country or grew here in the 1980s and the middle 1990s. We are worried that even some of them, let alone the more traditional industries, are under threat from the Government. Labour Members would be well advised to discuss the present and the future, rather than go over the past, which has been much debated in the House and with the electorate at large.

Mr. Peter L. Pike: Will the right hon. Gentleman say exactly how many industries closed in that appalling period between 1991 and 1992, and how many thousands of jobs were lost throughout the country? Will he say exactly what job he was doing at that time?

Mr. Redwood: I should be happy to research the answer to those questions after the Labour party has apologised for its part in those events.
The Labour party also says that, in the long term, everything will work out fine. It says that its policy is based on a stable and competitive exchange rate. Do Labour Members not realise that the long term is made up of a series of short terms? Even the fig leaf of their policy is blown away in the foreign exchange hurricanes that have been raging.
The President of the Board of Trade owes business a new policy. Are the Government out to create a stable currency at this very high level, which business thinks is uncompetitive, or are they out to create a competitive currency, which in the eyes of business should be at a lower level? She must concede that the Government cannot have a stable and competitive currency. Why do the right hon. Lady, the Chancellor and all those on the pager service keep mouthing this nonsense about having a stable and competitive exchange rate, when it is clearly unstable and uncompetitive?
Let us consider how unstable the currency has been. Since Labour came into office, the pound has risen 9 per cent. against the French franc, 10 per cent. against the


deutschmark, 20 per cent. against the drachma, 55 per cent. against the Malay dollar and 62 per cent. against the Thai baht. Those are our competitors, and they will undermine our manufacturers.

Ms Oona King: Will the right hon. Gentleman confirm that 70 per cent. of sterling's appreciation took place under the Conservative Government? Does he recall ever complaining about that at the time?

Mr. Redwood: It is true that sterling rose in the latter months of the Conservative Administration. It is also true that many manufacturers would now like to get back to that level, because they think that that would be a fair level for their businesses. What I am talking about, and what the hon. Lady should be concentrating on, is the huge increase in the value of the pound against certain Asian currencies and the substantial increase against continental currencies since Labour came to office. If Labour Members do not know that that has happened, heaven help this country. They should read the financial pages and understand the difficulties that the high rate of sterling is creating.
Labour Members may think that the good news is that we can take cheaper foreign holidays, which is true. However, the bad news will be counted by every British leisure business in fewer foreign visitors, and by every exporter in fewer foreign orders.

Mr. Geraint Davies: If the right hon. Gentleman were in government, what would he do about the yen, which has reached a six-and-a-half-year low? Does he deny that the value of sterling is linked to the Asian economies, the yen, the prospects for the euro and the recession in Europe? Is he in the isolationist world of fish-and-chip-shop Britain?

Mr. Redwood: I do not know where the fish and chips came from, but we are some way from enjoying them tonight, as there is much debating to be done. The Opposition believe that the problem of Japan should be handled by Governments collectively working through international bodies. We would support any sensible measures that the Government proposed in that connection. I shall come to the problems of euroland, because they are relevant to the present position.
Why is the pound so strong? The Governor of the Bank of England has warned that fears of a weak euro are partly to blame. He is right. The Leader of the Opposition has pointed out that a fudged euro does not help. He is obviously right. People around the world who are looking for a good investment are worried that the new euro may be weak or may be strained by the failure of Europe to keep to the requirements of the Maastricht treaty.
The Prime Minister has made two contradictory statements about this crucial issue. He has said that the euro must not be fudged. The Opposition agree with that proposition. He has also told us that Britain cannot object to all 11 candidates going ahead in the first wave, yet most of them can do so only with a liberal helping of fudge. Will the President of the Board of Trade clear up that confusion? Does she agree with the Prime Minister

that a weak and fudged euro makes sterling more attractive, and of itself adds to the misery of British industry? Does she agree that a lot of fudge is required to pretend that Italy and Belgium, which have both borrowed more than twice the limits permitted in the treaty, have qualified for the single currency? Will she persuade the Prime Minister to do something about that when he goes to important meetings to settle these issues?
Is the President of the Board of Trade aware that the 15 European Community countries have borrowed £660 billion more than is permitted under the Maastricht treaty? That does not include Britain, because it is below the reference level. Has she any idea how the member states that want to go ahead with currency union will repay £660 billion in the next couple of years in order to qualify, or does she think that the treaty requirements do not matter?
Does the President of the Board of Trade agree that, as Sweden is ruled out because it has not belonged to the exchange rate mechanism for two years, Britain is ruled out for the same reason? What do the Government intend to do about Britain' s membership of the exchange rate mechanism? Will she explain how Ireland qualifies, given that its currency has been too strong for the exchange rate mechanism and has recently had to be revalued? Is that not fudge in the prime ministerial sense of that word? If not, what would be fudge? Perhaps the right hon. Lady will take us into the Government's sweet shop and tell us.
How do the Government intend to influence Europe for the better, as they believe that expressing any different opinion from the rest will, in the Prime Minister's words, cause "mayhem"? The truth is that the Prime Minister will wield no influence whatever over decisions on the single currency.

Yvette Cooper: Does the right hon. Gentleman's concern about the single currency mean that he has now abandoned the position, as set out in his book, that the role of Britain should be to try to derail the system and to ruin the single currency before it starts? If so, should we expect a further softening of his position on the single currency in the future?

Mr. Redwood: I am delighted that the hon. Lady wishes to give my book the publicity of the Hansard record: it is very gracious of her. If she looks at the date of that book, she will see that it was addressed to the Conservative Government at a much earlier stage in the development of this scheme. It was good advice for those days, given where we then were. I shall explain shortly the advice of Her Majesty's Opposition in the new circumstances, and I hope that she will be patient, because I shall tell her what she wants to know.
According to the Prime Minister, we have the prospect of mayhem if we try to influence matters, but he has also said that he does not like fudge. It has, in effect, already been decided that 11 countries will go ahead with liberal helpings of fudge. That is against the Government's stated policy, it is against Britain's interests and it is against Europe's interests, yet the Prime Minister thinks that he can do nothing. He will do nothing and he admits that he will have no influence. What a tragedy for Europe and for our country.

Mr. Denis MacShane: It has taken the right hon. Gentleman nine minutes to get on to his


favourite theme of Europhobia, which is miles away from the motion on the Order Paper. As he is in the mood for apologies, will he take the opportunity to apologise for the gratuitous and unpleasant insult he offered to Chancellor Kohl, on whom the business men of Britain conferred the freedom of the City of London? Is the right hon. Gentleman capable of saying sorry in any language for that insult?

Mr. Redwood: I offered no insult to Chancellor Kohl, so I have no need to apologise. The hon. Member for Rotherham (Mr. MacShane) clearly does not like the fact that his Prime Minister is isolated at the Euro X meeting. The Prime Minister will be isolated in his indecision over this matter: he will be isolated by his prevarication and British industry will suffer as a result. That is central to the debate, but the hon. Gentleman does not seem to understand the argument. The Governor of the Bank of England has warned that a fudged euro is one of the pressures leading to a strong pound. Surely the Prime Minister should want to sort that out by taking the fudge out of the euro and helping to relieve some of the pressure on sterling.
Why will not the Prime Minister warn Europe that fudging will cause damage, as the German central bank has done? Why will he not go to the meeting and say that only those countries that meet all the requirements can be allowed in? He could congratulate Luxembourg and Finland: I am sure that they would be very happy together. Has he read the Commission's convergence report, which is a devastating document that finds problems in the case of all the other member states?
Of Italy, the Commission says:
There must be an ongoing concern as to whether the ratio of government debt to GDP will be 'sufficiently diminishing and approaching the reference level at a satisfactory pace' and whether the sustainability of the fiscal position has been achieved.
In other words, Italy does not meet the requirements. Similar words are used of Belgium. The Commission states:
the debt to GDP ratio is far above the 60 per cent. reference level.
Going along with a mechanism that one cannot bring oneself to join without explaining one's reservations is not impressive or statesmanlike, and it is certainly not heroic. It is weak and pathetic, and it leaves Europe to fudge. My argument is certainly in order, because part of the strength of sterling relates to the lack of Government policy on the issue of the single currency.
At a time when British manufacturing is on the rack, business is offered lectures by the President of the Board of Trade on how it should do better. The Foreign Office offers business an exhibition of how cool Britannia is or should be. The odd bouncy castle in Whitehall will not win back the lost markets that were destroyed by economic policies. I do not mind watching middle-aged men trying earnestly to re-create their youth, but I object to Ministers trying to do it at public expense. It is not seemly, and it is not helpful to British business.
Business does not need rebranding by the Government: it needs backing. It does not need subsidies and sympathy: it needs a sensible exchange rate policy, and to get that we need a sensible tax policy that backs savings rather than undermines them. It should not take too much money from manufacturers who need it to invest in the future. There is no point in lecturing business on the need for

new products and new investment while taking £25,000 million away from business over the lifetime of this Parliament. It is no good the Government saying that they want business to succeed while taking away the means to do so, and there is no point in saying that there will not be a return to boom and bust when the Chancellor has the distinction of creating boom and bust at the same time.
In July 1997, the Chancellor let the cat out of the bag in one of his Budget texts. He stated:
There is now an imbalance between strong growth in the consumer and service sector and weak growth in the manufacturing and exporting sector.
All his actions then and since have reinforced that crisis rather than tackling it or making things easier. It is not just the weakness of the fudged Euro-currencies that is causing trouble, because, at home, a hole was dug by the Chancellor when he took business money away and let the consumer spend and spend. He told the Bank of England to sort it all out, but it has its hands tied behind its back.
As usual, Labour Members will doubtless want us to answer the question, "What can be done?" There is a threat of more inflation: that is why the Bank increased the interest rate. I do not blame it for the problem, unlike some of the Chancellor's friends and spin doctors who, when an independent Bank was created, decided that everything that went wrong would be the Bank's fault and everything else would be the joy of the Chancellor.
I liken the Bank's problem to that of someone who is asked to play golf and given only a driver. He will find it an exceedingly difficult game. The Chancellor holds the other clubs, and he has put the player's ball in the bunker. No wonder the Bank is finding it difficult to get the ball out with only a wood. When an economy is as distorted as this one, with services in boom and manufacturing in decline, irons and a putter as well as drivers are needed to get out of trouble and hole the ball. The Chancellor does not seem to understand that, and lets his advisers blame the Bank.

Mr. Geraint Davies: Does the right hon. Gentleman accept that, although about a quarter of exporting manufacturers have had a turndown in orders, they have lower input costs for raw materials? The domestic market is booming, about a third of manufacturers are showing major growth, and employment continues to rocket. Manufacturing is not doing badly at all. After all, there was a trade surplus last year.

Mr. Redwood: The hon. Gentleman is half right. Much of the consumer sector has been booming, but manufacturing is in trouble. He should understand that. Today's industrial output figures and the statements from the companies that I have been citing and others show that exporters are in grave trouble. Asian and continental companies are coming into the home market and undercutting domestic manufacturers who would otherwise be able to sell products in our domestic market.

Mr. Lansley: The hon. Member for Croydon, Central (Mr. Davies) quoted some figures. Birmingham is a centre of exporters. Has my right hon. Friend observed that Birmingham chamber of commerce and industry in its announcement of its recent survey results on 1 April


stated that not only were exporting companies on the brink of recession, but that the slowdown in the home market for manufacturers was another legacy of the high pound? It stated:
a third of companies listed overseas competition as being of major concern".

Mr. Redwood: I am grateful to my hon. Friend. I did not see that quotation, but it is an effective example for my case.
There are two ways in which to take some heat out of the domestic and service economy without having to put up interest rates and sterling. One way is to tax consumption rather than manufacturing, and the other way is to promote saving. The Opposition support the savings route. We recommend a big savings package from the Chancellor. He should reverse the tax on pension savings. He could increase the interest and the tax-free allowances on national savings. He could make the tax relief on ISAs more generous and encourage an answer to the welfare review that would draw on the Conservative scheme for a second pension based on proper savings. He should sell more long-dated bonds to mop up surplus money, instead of issuing short-dated paper.
Those are positive proposals, which we mean well because we want to see our country and our manufacturers do well. Labour Members would be wise to listen carefully to our sensible proposals. The Chancellor should tell the markets that he intends to lower inflation by encouraging more saving. While he is about it, he should lift the threat of higher wage inflation resulting from the Government's legislation.
The economy faces difficult times. Many businesses and individuals are doing well while manufacturing is in grave trouble. There are still worries about inflation at a time when industry is on the brink of recession. Only this Chancellor could pull off that unique double. I say to Labour Members, "I do not expect you to back me or to praise my views. By all means follow the Whips and the spin doctors and make your routine criticisms of past Conservative policies if that makes you feel better. But understand that your manufacturing constituents in fear of their jobs and people who fear for their businesses expect you to speak for them. You have a duty in this debate to tell the Government before it is too late of the threat to industry from the high pound. If you do not do that, you will find it difficult to face yourselves tomorrow morning, you will have let down your constituents, and you will have failed to do your job."

The President of the Board of Trade and Secretary of State for Trade and Industry (Mrs. Margaret Beckett): I beg to move, To leave out from "House" to the end of the Question, and to add instead thereof:
deplores the Opposition's attempt to criticise the economic management of the Government as a feeble attempt to cover up their own appalling record of economic mis-management; notes that under the Conservatives Britain slumped in the world prosperity league, saw the slowest period of growth since World War II, saw higher average inflation than in any other major industrialised country bar Italy, and had the lowest level of investment of any of the 24 OECD countries; also notes that the Conservatives left office with manufacturing investment lower than it was when they came

to power, left Britain's share of world trade at its lowest ever, gave Britain a deficit on manufacturing trade for the first time ever, saw thousands of manufacturing firms go under due to their boom and bust policies, more than doubled the level of unemployment in their period in office, and left behind not a golden economic legacy, but an economy and public finances facing real difficulties; congratulates the Government on its prompt actions such as promoting the competitiveness agenda and fostering investment in R & D and innovation, and creating an open and transparent framework for monetary and fiscal policy to secure a platform of stability for growth and employment; and notes that the Government is addressing the problems which the Conservative Government left behind with positive practical proposals to take the nation into the 21st century.
This is a truly remarkable day and an even more remarkable debate, because in their motion the Leader of the Opposition and the shadow Chancellor, let alone the shadow President of the Board of Trade, are all calling for manufacturing to be higher up the Government's agenda and for a change of policy
before factories close and jobs are lost.
That is incredible. Where have they been for the past 18 years?
Where were they 10 years ago when the then Chancellor of the Exchequer, as a deliberate act of policy, drove sterling above the level that it is at today? Where were they when Britain registered the first deficit in trade on manufactures since the industrial revolution; when interest soared to 15 per cent., twice today's rate; when factories closed; and when jobs were lost the length and breadth of Britain as a direct result of deliberate Government policy?
The then Chancellor told us that manufacturing no longer mattered. At that time they were in direct control of interest rates, a policy that the right hon. Member for Wokingham (Mr. Redwood) says would solve manufacturing's problems. They were in the Government and some of them were in the Cabinet. When the interest rate was 15 per cent. the right hon. Gentleman, who claimed a little bit of amnesia, was a Minister in the Department of Trade and Industry. He now presumes to attack us for an interest rate that is half that level. He asked why I had not spoken out against high interest rates. Where was he? What did he say about interest rates and about manufacturing when interest rates were at twice today's level?

Mr. Barry Jones: May I remind my right hon. Friend that, when the shadow President of the Board of Trade was Secretary of State for Wales, he did nothing at all?

Mrs. Beckett: I know that the right hon. Gentleman rarely visited Wales—so it might have been a bit difficult to do anything there. Today, the right hon. Gentleman has claimed that the Government were wrecking manufacturing by giving independence to the Bank of England. All I can say is that the previous Government managed to wreck manufacturing without giving independence to the Bank.
Before the general election, when the exchange rate was climbing, most hon. Members who signed today's motion were in the Cabinet. As my hon. Friend the Member for Croydon, Central (Mr. Davies) said, two thirds of the recent increase in sterling occurred in 1996 and 1997—preceding not only the Government's election but the decision to place handling of interest rates in the


hands of the Bank of England and business tax changes. It is therefore difficult to decide whether the Conservatives' belated discovery of the importance of manufacturing represents a deathbed conversion, or simply mass hypocrisy, based on complete memory wipe.
I do not attempt to tag the entire Conservative party with that label, as there were always honourable—although only a few—exceptions. Although some men and women in the Conservative party supported British manufacturing However, they were lone voices crying in the wilderness in their party's utter neglect of—and sometimes outright hostility to—manufacturing.

Mr. Owen Paterson: Will the right hon. Lady give way?

Mrs. Beckett: Indeed I will, although the hon. Gentleman was not one of the exceptions.

Mr. Paterson: As someone who spent the 18 years of the Conservative Government travelling the world, selling abroad for British manufacturing industry—unlike virtually every Labour Member—I bitterly resent the crass and ignorant comments on Conservative policies, which enabled British industry to turn itself round. Will the right hon. Lady tell the House whether British industry is happy and can prosper with a deutschmark rate of 3.05?

Mrs. Beckett: I am not sure where the hon. Gentleman was selling his exports, but he certainly was not in this country seeing the demise of British manufacturing industry. Indeed, because of the policies pursued by the Conservative party, we sometimes feared the almost complete extinction of British manufacturing industry.
Down the years, Conservative Members who supported British manufacturing industry called, as we called, for recognition of the damage being done by the boom and bust cycle resulting from the crass incompetence of Tory economic management. They called, as we called, for support for policies encouraging long-term investment, particularly in research and development. They called in vain.

Mr. Paterson: Will the right hon. Lady give way?

Mrs. Beckett: No 
Under the Conservative Government, manufacturing investment fell—

Mr. Paterson: Will the right hon. Lady give way?

Mrs. Beckett: I shall not give way again to the hon. Gentleman, but will wait for another Conservative Member to intervene. His previous intervention was not so impressive as to make me feel inclined to listen to him again.

Mr. Philip Hammond: rose—

Mr. Lansley: Will the right hon. Lady give way?

Mrs. Beckett: Not for the moment.
Under the Conservative Government, manufacturing investment fell to an all-time low. Expenditure on research and development fell compared to that of our

competitors. As a proportion of our economy, manufacturing dropped by one quarter. Factories closed, and jobs were lost in their millions. None of the Conservative Members who have just intervened in the debate were in the House in that period. Presumably, all of them were out in the country, hopefully in some prosperous undertaking. Where they were not was in the House, watching British manufacturing being destroyed by the activities of the previous Government.

Mr. Lansley: I am grateful to the right hon. Lady for giving way on this occasion, if not on previous ones. She seems very keen to explain to the House her views on what is happening today. Will she therefore be sure not to move on without telling us about today's announcements on precisely what is happening in manufacturing output and production output? What figures have been announced today, and what view does she take of them?

Mrs. Beckett: I shall deal with that later in my speech.
After the first recession under the previous Government—I realise that Conservative Members wish not to think about their record in government, but they will have to—in the early 1980s, manufacturing output did not return to the level that they had inherited until 1988. In their second recession, in the early 1990s, manufacturing output fell again. In their entire period in office, manufacturing output grew annually on average by only 0.5 per cent.
The instability that devastated output also discouraged long-term investment, which lays foundations for the future. As a share of gross domestic product, manufacturing investment fell to its lowest level since 1955, and it rose again by an average—in the previous Government's entire period in office—of only 0.5 per cent. a year.
It is very important to keep putting those simple facts on the record: first, because the Conservative party—as usual—is trying to rewrite its history; secondly, and more importantly, because it is part of the context in which the British people and British manufacturers should judge the credibility of Conservative Members' comments in this debate. They should be judged not only on the worth of their current proposals but on their record in office.

Mr. Sheerman: Some of us have been puzzled by the Opposition's opening speech, in a debate chosen by the Opposition, as they have spent so little time dealing with the issue of the United Kingdom's core manufacturing capacity. Does my right hon. Friend accept that the fact that only 9,725 robots are currently being used in British manufacturing—compared with 400,000 in Japan, 55,000 in the United States and 48,000 in Germany—is the mark of the sophistication of our manufacturing industry? Over 20 years, the previous Government left us with very little of that sophistication.

Mrs. Beckett: My hon. Friend has a long and honourable record of campaigning for British manufacturing. He is entirely right to identify the many difficulties that were left to us by the previous Government.
The previous Government's record stretches over 18 years, whereas this Government's record extends over fewer than 18 months. However, in that short period, we have begun to tackle the deep-seated ills besetting British manufacturing industry. 


The very action of which Conservative Members now complain—placing control of interest rates in the hands of the Bank of England—was taken to foster confidence in the long-term stability of economic management. In the run-up to the general election, that confidence was damaged by the political manipulation of interest rates by the previous Chancellor of the Exchequer, the right hon. and learned Member for Rushcliffe (Mr. Clarke), who preferred to risk higher inflation, and the damage that that would cause, than to risk political unpopularity.
Long-term interest rates are already lower, and only the crassly irresponsible would suggest that a return to the boom and bust over which the Conservatives presided would be in Britain's interests.
We have not only taken that major step to promote stability, but our commitment to stable economic management, to a sound framework for discipline in public finances, to a reduction of public sector debt—which the previous Government ran up to unmanageable levels—are helping to create a sound and stable framework in which business can take decisions based on long-term judgments.

Mr. Crispin Blunt: If our public sector debt is at unmanageable levels, how can the Prime Minister support the applications for euro membership of all those other countries?

Mrs. Beckett: Unlike the right hon. Member for Wokingham, I shall not spend all my time in this debate talking about Europe rather than British manufacturing industry. However, I shall deal later in my speech with the point raised by the hon. Gentleman.
The decision to abolish dividend tax credits, the agreement—responding to calls from business—to abolish advance corporation tax, the introduction and continuation of enhanced capital allowances for small firms, cuts in corporation tax rates and changes in capital gains tax will all help to stimulate and support the investment that British manufacturers need for long-term success. Our commitment on business tax rates over this Parliament and our consultation paper on research and development both embody an approach sought by manufacturers for so many years, which, under the previous Government, they sought in vain.

Sir Robert Smith: As the right hon. Lady is talking about stability and long-term investment, does she accept industry's estimates that about 20 per cent. of manufacturing investment is connected to activity in the North sea oil industry? Does she also realise the concerns among many of those in the contracting sector about the instability caused by the Chancellor's continuing indecision in his plans for oil taxation? Those concerns are affecting investment decisions, which may be put off for another year.

Mrs. Beckett: With respect to the hon. Gentleman—who takes a great interest in those matters—he must be aware that that industry has itself asked for consultation on the Government's proposals for taxation, and for its views to be taken into account. Furthermore, the industry

specifically asked for the Chancellor not to introduce changes in the North sea regime without consultation, as the previous Government did. Therefore, I understand the point that the hon. Member for West Aberdeenshire and Kincardine (Sir R. Smith) makes, but he will recognise that it is a bit of swings and roundabouts in that respect.

Mr. John Bercow: Will the President of the Board of Trade acknowledge that higher interest rates, increased business taxation and a soaring pound damage British industry, in some cases lethally, depriving businesses of export orders and getting rid of jobs? If she acknowledges that, why does she not have the decency to admit it, instead of skirting around the subject for the first 13 minutes of her speech?

Mrs. Beckett: I am not skirting around anything. The hon. Gentleman clearly has not been listening. Apart from anything else, I have pointed out how much more damaging was the record of his party in government. Interest rates were at twice the level that they are today.

Mr. James Cran: rose—

Mrs. Beckett: I am going to get on a little further, if the hon. Gentleman will forgive me.

Mr. Redwood: Will the right hon. Lady give way?

Mrs. Beckett: Of course.

Mr. Redwood: The President of the Board of Trade is all charm, as always.
I am delighted that the right hon. Lady now agrees that the policies of her Government are damaging. She has just said that she thought that Conservative policies were more damaging, but she has conceded that the policies that this Government are following are damaging. Does she agree with the TUC forecast that 100,000 to 200,000 jobs will be lost as a result of the Government's policies in manufacturing, and is she or is she not going to do something about it?

Mrs. Beckett: I have had a chance only briefly to check on the figure that the right hon. Gentleman gives, but I think that he will find that he has added together two figures in the TUC's forecast that are not meant to be added together. It is not making the forecast that he claims. Nor did I say that I accepted that the Government's policies are damaging British business; I do not accept that. What I did say was that I accepted that there is concern, understandably, about the level of sterling and of interest rates. However, I pointed out that interest rates were at twice today's level when he was at the Department of Trade and Industry.

Mr. Cran: Will the right hon. Lady give way?

Mrs. Beckett: I am sorry. I must get on a little more. I will give way to the hon. Gentleman perhaps a little later.

Mr. Cran: Will the right hon. Lady give way?

Mrs. Beckett: No, not at this moment. Sorry.
Apart from the tax framework that we have begun to deliver, British manufacturers have also long sought further investment in education, in skills and in transport infrastructure. Slowly and steadily, that too is beginning to flow. The new deal, the university for industry, the emphasis on lifelong learning, the investment in education for the early years, the improvement in standards—

Mr. Cran: Will the right hon. Lady give way?

Mrs. Beckett: No. In fact, if the hon. Gentleman does not give me a moment to finish this paragraph, I will not give way to him at all.
The improvement in standards, the extra money for schools, including for long-needed capital investment—all those sit alongside other measures in the recent Budget such as investment in the transport infrastructure and the university challenge fund, a new venture capital fund, to encourage development of the new ideas flowing from British universities.

Mr. Cran: Will the right hon. Lady give way?

Mrs. Beckett: I was willing to give way to the hon. Gentleman, but, as he is persistently and rudely interrupting me, I am afraid that I no longer intend to do so.

Mr. Cran: rose—

Mr. Sheerman: On a point of order, Mr. Deputy Speaker. What sort of rules do we have in this Chamber, where someone who sits as a Whip one moment is sent by the Front-Bench spokesperson to sit behind him and barrack and intervene on a Labour Member, who is making a serious speech about manufacturing industry?

Mr. Deputy Speaker (Sir Alan Haselhurst): There has always been some flexibility on these matters for the Opposition.

Mr. Cran: On a point of order, Mr. Deputy Speaker. Since when has even a Whip not been able to stand and speak for his constituency? In this case, I wanted to ask why—

Mr. Deputy Speaker: Order. The hon. Gentleman has been here long enough to know that that is a totally bogus point of order.

Mrs. Beckett: I am extremely grateful to my hon. Friend the Member for Huddersfield (Mr. Sheerman) because he has answered a little problem that was puzzling me. When the hon. Member for Beverley and Holderness (Mr. Cran) began to intervene, I was slightly surprised because I did not remember seeing him sitting there, and I almost accused him of not having been in the debate, but I thought that that was unfair and that I must be mistaken. However, my hon. Friend has answered the mystery for me. The hon. Member for Beverley and Holderness was here, but not in that place.

Mr. Cran: Will the right hon. Lady give way?

Mrs. Beckett: No, I will not.
Within the DTI, one of our first steps was to set up the partnership with British companies, including British exporters, which we promised before and during the last election. The early establishment of the export forum allowed us to draw on the experience and expertise of British exporters. We reversed the wildly unpopular decision to abolish trade fair support, accepted its recommendations for a more focused effort in the key markets that they identified, put in place the largest programme ever of trade fairs and trade promotion campaigns, and recently published a package of proposals that are specifically targeted to help the small exporter.
All that is especially relevant to manufacturers, because they represent the lion's share of our international trade. That trade has undoubtedly been and could continue to be affected by the strength of sterling. The picture, however, is far more patchy—and hence more difficult to read and judge for its policy implications—than the Conservative party pretends.

Mr. Howard Flight: The right hon. Lady went through the economic history of the past 20 years. Does she accept, as most economists do, that the recessions of the early 1980s and early 1990s were caused primarily by the overvaluation of sterling? That is the very point that Conservative Members are seeking to make: the risk of an overvaluation of sterling can cause precisely what we went through before, which is not stability.

Mrs. Beckett: I do not think that the hon. Gentleman has been listening. Although I understand the concern about sterling's level—the Government have made it plain that, although we want a stable sterling rate, we also want a competitive rate—it is not just for Conservative Members to make that complaint, as they took interest rates to twice today's level and sterling to above today's levels.

Mr. Cran: Will the right hon. Lady give way?

Mrs. Beckett: I will not give way to the hon. Gentleman.

Mr. Cran: The right hon. Lady is frit.

Mrs. Beckett: I am sorry, but I do not even remember precisely who the hon. Gentleman is, so the notion that I am frightened of him is extraordinary.
Although exports of goods fell—in value and volume in January—on the latest figures, they are still running above the levels of a year ago; in volume, in fact, exports are a full 6 per cent. up. Although the deficit on trade in goods with the world as a whole rose over the past quarter from £3.5 billion to £4 billion, with a fall in exports and a slight fall in imports, in that same period, the deficit with European Union countries fell. It was the deficit with non-EU countries that rose. 


An important part of that patchy picture is that against, for example, the dollar, sterling has remained relatively steady. It is against EU countries that it has risen so much and so sharply.

Mr. Cran: rose—

Mr. Paterson: rose—

Mrs. Beckett: I give way to the hon. Member for North Shropshire (Mr. Paterson).

Mr. Paterson: If the right hon. Lady had read the Evening Standard tonight, she would have seen that industrial production has dropped for the sixth month out of seven, but will she please go back to my first question, which she has not yet answered? Is she happy with an exchange rate of DM3.05 to DM3.10 to the pound, and what representations is she making to the Chancellor, whenever she meets him, on that?

Mrs. Beckett: I have dealt with the hon. Gentleman's point repeatedly and I do not propose this second to return to it, although I may do so later in my remarks.
As I say, the point is that sterling against the dollar has remained relatively steady, yet that is the sector of trade that has fallen. Trade with EU countries has certainly not been affected in the same way, although it is against the currencies of EU countries that Conservative Members complain sterling is too high.
I do not suggest for a second that that means that sterling's level against the deutschmark and other EU countries' currencies is unimportant. I point out just that the picture is more complex and not entirely clear. Even the factors influencing manufacturers' costs do not give us a simple picture. The official statistics suggest that the overall price of raw materials and fuels that are used in manufacturing has fallen by a sixth over the past two years and by a tenth over the most recent year. Moreover, according to the most recent statistics, manufacturing output has little changed. In fact, over the past quarter, it was higher than a year ago and, in March, it grew at the fastest rate since May 1997. New orders also grew.
The March CBI monthly trends survey shows that the balance of manufacturers expecting to increase output over the next four months has risen slightly to reach the highest levels since October, and the CBI's forecast projects growth both in exports and manufacturing output over the year. Nevertheless, it remains the Government's long-term objective to achieve a stable and competitive exchange rate. We shall continue to pursue the policies that have already been outlined, in the belief that they will contribute to achieving that goal.
But what about the prescription urged upon us by the Conservative party? First, what is it? The shadow President of the Board of Trade says that the Government should do three things: first, they should take back control of interest rates; secondly, they should reverse the changes made in business taxation; and thirdly, they should take steps to increase savings. Let us take them one by one.
The first suggestion is a move to take back control of interest rates so that they can, I presume, be reduced, in the hope—

Mr. Oliver Heald: Hear, hear.

Mrs. Beckett: That is extraordinarily helpful. The hope is that that will reduce the level of sterling. Yet again, that runs the risk of weakening the fight against inflation and reawakens precisely the spectre of boom and bust that characterised the right hon. Gentleman's party's record and decimated British manufacturing in the 1980s and 1990s.
Secondly, the shadow President of the Board of Trade calls on us to reverse any and all steps taken in a balanced package of taxation changes, including the windfall tax, which laid the foundation for the new deal, and for increased investment in skills and infrastructure—all things that manufacturers want carried out. Presumably they would all have to go. [Interruption.]

Mr. Deputy Speaker: Order. I am sorry to interrupt the right hon. Lady, but I have to tell the hon. Member for Beverley and Holderness (Mr. Cran) that sedentary comments are not an acceptable substitute for proper interventions, and the right hon. Lady has refused to take any interventions from him.

Mrs. Beckett: If the shadow Secretary of State resists all our changes in business taxation, he must be calling either for a still greater tightening of public expenditure—no more money for health and education—or for increases in VAT or personal taxation. There is simply "no other 'ole to go to".
In fact, the right hon. Gentleman claimed today that there were two ways to tighten the economy other than through interest rates and sterling. He claimed that they were merely to promote savings or to tax consumption—that is presumably to extend or increase VAT, which we all know is the Conservatives' tax of choice. Of course, that is the tax policy that the Tories pursue but do not admit in advance. There cannot be much doubt that, given half a chance, they would put VAT on fuel back to the 17.5 per cent. that they proposed, and slap VAT on a range of other items.

Mr. Redwood: rose—

Mrs. Beckett: I am happy to give way to the right hon. Gentleman if he will deny that.

Mr. Redwood: The Opposition have made it clear that we are not proposing any taxes on consumption—we are proposing improvements in savings. I do not know how many times we have to say that, but it is clearly our policy. Of course I and my colleagues are recommending a lower level of public spending than the Government—one has only to consider the number of things that we have opposed already which have needlessly been consuming public expenditure, including all the referendums, devolution administration and so on. They are all things on which we would not have spent money.

Mrs. Beckett: I am grateful that the right hon. Gentleman is confirming that he supports a lower level of


public expenditure than the Government are prepared to allow. He may claim that he is going to save money on things like referendums but, viewing the record of the Tory party, most of the British public will recognise that what they are talking about means not pursuing the increases in health and education spending which this Government have introduced.
I had not forgotten that the right hon. Gentleman's chief answer was that the Government should increase savings. It seems to be his main, if not his only, solution. He has expressed concern—for example, in the Budget debate—at a predicted savings ratio of 9 per cent., but, as was pointed out in an intervention, the savings ratio fell to 6 per cent. under the Tories. The right hon. Gentleman claimed that savings as such are falling; in fact, they are going up.
Let us take the right hon. Gentleman's prescription at face value. What steps is he proposing to stimulate savings? The usual incentives would generally be higher interest rates. That would be consistent with the Tories' record—including their record when the right hon. Gentleman was at the DTI—but it seems unlikely to reduce the level of sterling. Today he called for more interest to be payable on national savings, and for more generous tax allowances. That of course means a fiscal loosening, while those who have argued that the Chancellor is not doing enough are arguing for a fiscal tightening. It is certainly contrary to what most commentators who criticise my right hon. Friend, as the right hon. Gentleman has done, are saying. The right hon. Gentleman's prescription makes no sense.
Let us consider what might follow if we were to take the prescription at face value. It rests most heavily on the call on the Government to cut interest rates and, in order to do so, to take back control over them. As has been pointed out several times today, two thirds of the rise in sterling took place before interest rates rose, and while interest rates were in fact controlled by the previous Government. There is certainly a widespread and increasingly strong view that it is a combination of the Asian crisis and nervousness about the soundness of the euro which is attracting investors into sterling, because Britain will not be in the first wave.
The right hon. Gentleman spent most of his speech talking not about manufacturing industry but about the euro. If he agrees with those who argue that one of the things that is putting pressure on sterling is the fact that Britain is not going in, should not he be calling for an early announcement that Britain will go in? That is the logical outcome to the argument that he deploys, and I am surprised that he failed to notice that that is where 10 minutes of his speech were taking him.

Mr. Redwood: The right hon. Lady was not listening to what I said. I said that it was a fudged euro that was putting the extra pressure on sterling, as the Governor of the Bank of England identified. Going in at this high level of sterling would simply lock British exporters into a prison from which they could never escape, and it would mean that we never recaptured the industrial activity that is already at risk.

Mrs. Beckett: I am not advocating going in at this point or at this level of sterling. It is the right hon. Gentleman's argument that leads inexorably to the

conclusion that that is one of the ways to weaken the pressure on sterling. The Liberal Democrat party may be somewhat unrealistic in ignoring the clear statement of the Governor of the Bank of England that Britain could not go in in the first wave as a result of the folly in government of the Tory party, but at least it is consistent in so arguing.
The message of the right hon. Member for Wokingham is muddled, inconsistent and, frankly, crazy. It risks the worst of all worlds. A politically driven interference with interest rates would certainly foster inflation, and if, as some of the evidence suggests, it is not Britain's interest rates but Britain's absence from economic and monetary union which is driving up sterling, it would also fail to bring down the exchange rate as he suggests—yet another double whammy.
The Conservatives have tabled an opportunistic motion, based on an unconvincing argument and on the assumption that the rest of the world suffers from their amnesia. Their record on British manufacturing is appalling, their prescription at best ludicrous, and at worst damaging. They offer sound without substance. Their arguments and policies put them where they are now and, on the evidence of this debate, will keep them there for years.

Mr. Richard Page: I am a vehement and ardent supporter of manufacturing, and my record over the past 18 years proves it. I have never forgotten that this country's wealth was based on the industrial revolution and the manufacturing that flowed from it, although, at times, various Governments have taken their eye off the ball.
I believe that the Department of Trade and Industry is the second most important Department of Government. The sophisticates will have us say how important the Department of Social Security, the Department for Education and Employment and the Department of Health are because they spend billions of pounds, but I am always conscious of the fact that it is the manufacturing sector that creates the wealth that enables them to spend that money.
There has been some swapping of reminiscences, but I remember being in the House during the humiliating visit from the International Monetary Fund to bail out the Government when they got their spending out of kilter with their income. As the President of the Board of Trade said, quite correctly, we have to look forward and not rewrite history, although I think that for quite a few Members of Parliament the temptation to do just that will prove irresistible.
I said that some Governments take their eye off the ball, but I do not include the previous Government under the premiership of my right hon. Friend the Member for Huntingdon (Mr. Major), with my right hon. Friend the Member for Henley (Mr. Heseltine) as President of the Board of Trade. During that time, there was a welcome return to focusing attention on manufacturing, competitiveness and quality of production.
The current Government are losing out a bit. I do not blame the Ministers at the Department of Trade and Industry, because, with the exception of Lord Simon, who seems to have vanished without trace, they have little manufacturing managerial experience. That is not their


fault, and we cannot blame them for it, but if they had had experience, they would have seen the warning signs about manufacturing a few months earlier.
I shall not trample over the ground covered by my right hon. Friend the Member for Wokingham (Mr. Redwood) on the strong pound, but I should like to counter the simplistic argument that, because Germany and Japan have learnt to live with a strong currency, so should we. We can, but it must be on the same time scale.
In 1984, the exchange rate was DM3.74 to the pound. Compared with the current rate, German manufacturers have had to deal with a 1.5 per cent. per year to strengthening of the deutschmark since then. Taking the value of two or three years ago, that figure rises to 3 per cent. Our manufacturers have had to swallow a 25 or 30 per cent. strengthening of sterling over the past couple of years. No manufacturer can claw back that increase through productivity improvements over such a short time. With our interest rates running at twice the level of those of most of our major competitors, that is a double blow.
This debate is important, because it underlines the basis of our economy and how it will develop in the coming years. The Conservative motion correctly concentrates on those issues. The Government amendment is largely a tendentious account of the past, with some wishful thinking for the future. It does not recognise the serious problems that the British manufacturing sector faces, and it does not come up with any proposals to tackle those problems.
It is in nobody's interests to ignore the facts. There has been—dare I say it—a lot of infantile shouting across the Chamber, which has not contributed greatly to the debate. After 1992, our manufacturing output increased year by year. Unfortunately, there are now signs that it is peaking and starting to go the wrong way. If everything was marvellous, we would not be reading in the papers about the difficult choices facing General Motors and its work force in the United Kingdom. To make matters even more complicated, wage costs continue to rise as the sterling price of exports runs into trouble.
In 1994-95, and in the latter part of 1996 and the early months of 1997, output grew strongly. Gains in productivity were secured and unit costs came down. However, there are now problems with our output. There could be stagnation or a decline in productivity. Those trends can be reversed only if manufacturers consider ways of trimming the size of their work force, laying off those who have recently left the unemployment register. We do not like that uncomfortable truth, and I am sure that Labour Members do not either.
It is no good saying that the problem can be addressed through an open and transparent framework for monetary and fiscal policy. The Governor of the Bank of England has been given control over the one lever with which to control monetary policy without a matching fiscal policy from the Chancellor. That is less than sensible. It will prove to be another financial theory that bites the dust.

Mr. MacShane: The hon. Gentleman is making an interesting and constructive speech. Does he accept that my right hon. Friend the Chancellor has taken £17 billion out of the economy? Does the hon. Gentleman think that

he should have taken £20 billion or £25 billion? Does he agree with his Whip, who said, "Hear, hear," when the abolition of the Monetary Policy Committee was suggested, with control over interest rates reverting to Whitehall? That is not a provocative question. I am genuinely interested in the hon. Gentleman's response, because I respect his point of view.

Mr. Page: The hon. Gentleman makes a fair point. The Chancellor has bitten into the economy in the wrong place. We wanted to cool the activities in the marketplace, to reduce internal inflation. The Chancellor has put an extreme burden on industry, which will work its way through with the double whammy of high interest rates and a high exchange rate.
I am not surprised to read reports that the Chancellor is hoping that the Bank of England will give a signal later this week that interest rates have peaked and will not rise further. That has all the characteristic subtlety of a Treasury spin doctor. Unfortunately, it is too late. Manufacturers will intensify switching production abroad, because—as I think we all accept—the exchange rate is too high.
We should skip all the childish banter and get to the reality. AG Holdings, our largest drum manufacturer, is moving production to France. The engineering group Haden Maclellan will buy half its paint shop components and one quarter of its fasteners abroad. Others will follow those two. That means that jobs are being exported from the United Kingdom, helping the economies in other countries rather than ours.

Mr. Geraint Davies: If things are so bad, how does the hon. Gentleman explain the fact that last year we had the first trade surplus since 1985, and the largest since 1982, at £4.5 billion? In 1996, we had a deficit of £1.8 billion, when, as others have pointed out, 70 per cent. of the sterling appreciation had already occurred. The hon. Gentleman seems to be describing a different world from that in which we are living.

Mr. Page: I do not know whether the hon. Gentleman has ever worked in business or industry. He should know that there is a time lag in business. The current figures should show what will happen tomorrow if measures are not put in place to correct them. We believe that the higher rate of sterling will have a damaging effect on manufacturing. That effect will intensify unless action is taken to rectify the situation. Action a few months ago would have reduced the pain. Action now will reduce the pain. However, if we go on blindly, there will be further unemployment and even more pain. We are trying to point out delicately that something should be done.

Mr. Davies: The hon. Gentleman might be interested to know that a week ago I had lunch with the chairman and chief executive of Nestle, which exports £300 million of produce. They pointed out that, while the level of sterling obviously causes difficulties for their export business, the Government's long-term policies are correct to create a healthy context for buoyant growth for Britain in the global economy.

Mr. Page: I hope that the hon. Gentleman had a satisfactory and enjoyable lunch. Nestle is a large company with plants all over the world. Undoubtedly


it will take certain strategic decisions. Many British-based companies do not have the same options and flexibility as larger companies. The hon. Gentleman does not help his cause by pleading on behalf of a large multinational. With the high rate of sterling, our splendid record of inward investment is starting to dip. Companies abroad are not going to invest in Britain. A year or so ago, however, we had the enviable record of the highest investment percentage of any European country.
The fundamental problem we must face cannot be tackled by the old sticking-plaster approach of Labour Governments, yet that is exactly what is beginning to be contemplated. Ordering electricity generators to buy up to 30 million tonnes of coal from UK producers, irrespective of prices on the world market, will not help the productivity of British producers or make them more competitive. Labour Members should remember that, when the Conservatives came to power in 1979, we were putting our hands in the taxpayers' pockets for £50 million every week, and that, now, approximately £50 million is being given to the Exchequer in taxes.
We have heard a great deal about the Government's policy towards the young and the young long-term unemployed. I am concerned that any benefits that might flow from such a policy will be offset by what is happening with the high price of sterling. I was therefore not surprised to read that, when Mr. Christopher Kelly, the Treasury's head of economic briefing and analysis, was asked whether the manufacturing sector was likely to go into recession, he replied that the Treasury was forecasting zero growth this year. Today, a report by the Centre for Economics and Business Research Ltd. said:
Strong pound means a mini-recession and rising unemployment.
It is therefore not surprising that the TUC expects unemployment to rise by 200,000. Perhaps figures are being added together, but as far as I am concerned, the figure is 200,000 unless somebody can prove that the TUC did not make such a statement. If such a number of jobs were lost, there would be further deterioration and we would go into a downward spiral, as opposed to the virtuous upward spiral that the Conservatives achieved, giving the Labour party its golden legacy.
If we start on such a downward spiral, Labour Members will be back to the old routine. They will be calling for full-scale programmes to stimulate public expenditure and to help the economy to generate growth—whatever the implications for inflation. Unless The Times is mistaken today, there are already Cabinet splits, with mention of the Deputy Prime Minister and the Secretary of State for Education and Employment, whose names are of course attached to the Government amendment.
The sad fact is that, despite all the Government's fine words, they cannot escape from the economic cycle that they have created. They have happily tightened taxes on business in the past year, while allowing sterling's rise to weaken our export performance and increase the attractiveness of imports. Now the Government are caught between those two rocks of contradiction, and we shall see unemployment rise and companies fail. It is no good Labour Members throwing their hands in the air and claiming that it is all somebody else's fault. Undoubtedly, they will all go into the Lobby to vote for the Government amendment.
I think that it was the playwright Alan Bennett who said that he had always felt that the past was over, that somehow he had missed it, and that now it was starting

all over again. New Labour will find that the spectre of old Labour has not been exorcised, but is alive and well. The strong pound might give the Prime Minister a little extra spending money in Tuscany this summer, but driving our manufacturing into recession is too high a price to pay.

Mr. Denis MacShane: I am very pleased to follow the hon. Member for South-West Hertfordshire (Mr. Page), who was a most excellent Minister in the Department of Trade and Industry—that is not quite what I said at the time—but, alas, does not represent his party's Front-Bench policy. That is a great shame.
We heard a magnificent speech from the right hon. Member for Wokingham (Mr. Redwood), who has left the Chamber. His speech was one of a valiant shadow Foreign Secretary, since two thirds of it was on Europe. His speech was also one of a valiant shadow Chancellor of the Exchequer, since he told us what the Chancellor should do. I wish the right hon. Gentleman well in the reshuffle. Perhaps, instead of a job share, he can combine both posts and fit everything into his head. His speech was not remotely about British manufacturing or remotely relevant to the motion.
As I am a great friend of the Trades Union Congress, I am very pleased that the Conservatives pray it in aid. Conservative Members ought to look at the TUC's prognosis that, on a simple linear projection—we can all do that—200,000 jobs could be lost in manufacturing and services. Only 90,000 of those could be in manufacturing over the next two years, which, although that would be 90,000 too many, has nothing to do with the poorly worded motion.
The past is another country. I agree with the hon. Member for South-West Hertfordshire that running over it is not helpful. In the previous debate, we were taken right back to the White Paper "In Place of Strife", and we have had a run around what happened in the 1970s, 1980s and 1990s. I shall try not to do that, although it is rather difficult to avoid just the teeny-weeniest tip-toe back—not too far. I am a reasonably new Member—there are many new Members—and what happened under previous Governments can be left in the past.
We need to consider the fact that the significant rise of sterling that is worrying us all took place between May 1996 and May 1997—when it rose by 20 per cent. As the hon. Member for South-West Hertfordshire rightly said, we cannot simply pray in aid the German, Swiss, Dutch or Japanese experience of living with a strong currency over time. Believe me, I am taking us into the 1970s and not trying just to make an anti-Conservative point; as everybody knows, I am a bipartisan kind of fellow.
We have suffered from a yo-yo currency. Between May 1990 and May 1997, under two Prime Ministers and four Chancellors, the rate between sterling and the deutschmark changed no fewer than 87 times. No business person can seriously plan or deal with that. The dollar was relatively stable. There was a great deal of money to be made by the George Soroses of the world or on for-ex trading, but for the business man, the manufacturer, who was trying to plan his output and draw up a macro-economic plan that would make sense, such permanent instability was one of the most damaging factors.
British Steel, of which I know something as one of its biggest plants is in my constituency, saw a massive 50 per cent. drop in profits, from £1.1 billion to £450 million, when they were announced halfway through the summer. In other words, its profit hit was a result of the previous Government's policies.

Dr. Palmer: Conservative Members are quite persuaded of my hon. Friend's point about the need for stable exchange rates, because they were pressing the President of the Board of Trade to quote an exact rate that she would think appropriate—DM3.05, DM3.02, or whatever. If that is what they want, they clearly want a fixed exchange rate.

Mr. MacShane: Playing the game of what the rate should be is interesting and useful—we do it with our children—but I am not sure whether it is a realistic contribution. We must create the conditions across the economy that back manufacturing and achieve what may be an impossible double goal—stability and competitiveness.
I put these questions regularly to the right hon. and learned Member for Rushcliffe (Mr. Clarke), when he was Chancellor, and to his minions at the Treasury, and answer came there none. He said that the free markets decide. In March 1997, he said that he did not control the value of the pound. That is official Conservative policy, and is no different from the remarks of the putative shadow Chancellor, the right hon. Member for Wokingham.
When the right hon. Member was asked whether he would renationalise the Monetary Policy Committee—whether he would abolish it and send all the economists and Dr. DeAnne Julius back to work—and bring control of interest rates back to the Treasury, the hon. Member for North-East Hertfordshire (Mr. Heald) seemed to agree, while the right hon. Gentleman shook his head vigorously. I thought that it was a cardinal virtue of modern Tory faith that there should be independence for the Bank of England. I invite Conservative Members—we have some experienced business people and City experts in the Chamber—to raise their hands if they think that the Monetary Policy Committee should be abolished and control returned to the Bank of England. The House has the answer it deserves.
If that is not an answer, what is? I am passionately in favour of manufacturing. The right hon. Member for Wokingham made some unpleasant and snide remarks about Powerhouse UK and the bouncy castles now open in Horse Guards parade. I ask my hon. Friend the Minister for Science, Energy and Industry to stretch the public sector borrowing requirement by a little to provide free passes for all hon. Members. I went there on Sunday, and I was delighted to see the creativity, the new talent and the energy of which British manufacturing is capable.
One of the great myths with which we have to deal—what we may call the Lawson myth—is that trading a pound, and making a pound by trading a pound, is just as good for the economy as making a thing and making a pound by selling the thing. I am not sure whether the hon. Member for leather goods—the hon. Member for North Shropshire (Mr. Paterson)—would agree with that

philosophy, although some of the experts in rentier capitalism did very well under the Lawson philosophy. That is complete and utter rubbish. The thesis that we are entering a so-called "weightless economy" in which all that counts is the service industry is not supported by the facts.
Britain imports and exports six times more in tonnes of goods than it did 30 years ago. If one looks through our newspapers and magazines, what does one see? The pages are full of advertisements for things; for goods such as the hon. Member for North Shropshire and his company make—I did not mean any offence in my remark. Long may the British leather industry flourish.

Mr. Flight: Will the hon. Gentleman give way?

Mr. MacShane: To an expert in the field, of course.

Mr. Flight: Will the hon. Member acknowledge that, in a world of relatively free trade, goods will be produced where the cost is lowest, and that the mixture in countries such as Switzerland of good international services with industry is perhaps ideal? The argument that one is more virtuous than the other is not valid.

Mr. MacShane: I am glad to see that, even without a beeper, the hon. Gentleman is completely on the new Labour message. That is exactly the point which the Prime Minister and the Chancellor make all the time. I know a little about Switzerland, which is a good example. Some 10 per cent. more of Switzerland's working population are in the manufacturing sector. A strong manufacturing sector is what supports strong financial, service, insurance and banking sectors.
I want some re-balance and an end to the Lawson years. We must refuse to embrace the new, fashionable and pernicious thesis of the weightless economy. I want a commitment to manufacturing—which, I must say, was not in evidence during the Conservatives' period in government. Over the past six years, Britain's manufacturing exports have increased more than the export of services. We are a wonderfully creative and talented country, capable of making wonderful new products.
The hon. Member for Arundel and South Downs (Mr. Flight) is a proponent of the Adam Smith theory of free trade and comparative advantage. It is remarkable that the hon. Member for South?West Hertfordshire prayed in aid the example of a company that moved to France, when, only a few hours ago, we heard that nobody would go to France because the social and labour costs were too high.
Where are many of the goods that we buy in our giant shopping centres manufactured? Most of the computers are made in Taiwan, whose GDP per capita is a bit lower than that of the UK. However, it has a statutory minimum wage set at 70 per cent. of average industrial earnings in Taiwan. I am not remotely suggesting that such a recklessly high figure should be put into the debate here. A huge number of goods are imported from Singapore and Hong Kong, as was, where the GDP per capita?the standard of wealth of those countries?is above that of the UK. It is a myth that manufactured goods only belong in low-wage economies.

Mr. Charles Wardle: Before the hon. Gentleman waxes too eloquent about the economic


success of Taiwan—like him, I greatly admire that country's achievements—will he remind the House that a great deal of what Taiwan sells is now made by their cousins in Fukien province on the mainland at very low wage rates and low direct labour costs, and is then brought to Taiwan and exported to the rest of the world, contributing to Taiwan's success?

Mr. MacShane: Alas, I have visited Taiwan only once—although I have travelled and worked widely in Asia. I was deeply impressed by the remarkable combination of technological know-how and a commitment to manufacturing on the island, in addition to the sub-contracting that takes place. As someone who believes passionately in free trade, I support those developments.

Mr. Michael Colvin: The hon. Gentleman has just referred to Taiwan's high technology. Not only is Taiwan facing higher unit labour costs—which is why so much of its manufacturing is now done in mainland China at one twentieth of the cost it would be in Taiwan—but it lacks some of the high technology. That is why the developing countries of the far east are trying hard to attract from the west the advanced technology that will enable them to combine lower wage costs with high technology. If that happens, we will have a problem in the west.

Mr. MacShane: I was born an optimist and I shall die one. I have confidence in our country and in its abilities, and in the abilities and talent of the west to continually move upstream. At the same time, we must not ignore the fundamental contribution that basic manufacturing makes.
I mentioned steel, a subject to which I shall return at the end of my speech. I represent a steel constituency, and steel is a profoundly environmentally friendly product. It now involves the latest technology. If one visits a steel mill, one does not see men cowering in front of furnaces, although the plants are still tremendously dramatic places to visit. Now, the majority of the men sit behind computer screens. That is exactly the sort of high-tech industry in which we need to invest, but it has not had the backing of the country as a whole—again, I say this on a bipartisan basis—that it deserves.
I will briefly suggest three measures to support manufacturing. First, we must continually invest in training. In Edinburgh the other week, I was impressed to hear Hans-Olaf Henkel, the president of the German employers federation, who is a great fan of the deregulated, flexible labour market in Britain, make a powerful speech saying that the one thing that the Germans would never give up was their commitment to training. Whenever I or my hon. Friends have argued for an equivalent commitment by employers to training in this country, we have been told that we would be imposing an unbearable additional cost on them.
I am delighted that the new deal contains a strong training component and excited by the concept of the university of industry. When it gets off the ground, it will help to connect many of our skilled people.

Mr. Hammond: rose—

Mr. MacShane: I mean no discourtesy to the hon. Gentleman, but I want to allow other hon. Members to speak in the debate, so I want to finish my remarks.
The second necessary development is to break the centralised power of London over so much of our economy. One of the most exciting aspects of the new Government has been the move towards decentralisation. I welcome the creation of regional development agencies. Like the successful economies of the world—the United States, with 50 states setting their own tax levels and attracting their own investment, Germany with its Lander system and Switzerland, with its 24 cantons—we must have a local economic response and give my region of South Yorkshire, for example, the power to control more of its economic destiny. Watch us take off if that happens. We have to break completely with the centralised Tory state set up in the past 20 years.
Thirdly, we need a relationship with Europe. I have no doubt in my mind that the contribution from the shadow President of the Board of Trade was disgraceful—that obsessive, bubbling Europhobia burst its banks. We need a relationship with what is loosely called Euroland—that is now the technical term for the countries entering European monetary union—and it will require a fundamental decision by the people of this country.
A great signal was sent last May, when the Europhobic policies of the Tories were utterly rejected at the ballot box, and the Chancellor sent good signs in his statement in November. What has been the reaction of the Conservative party? Instead of grappling with that debate, we read—

Mr. Paterson: rose—

Mr. MacShane: If the hon. Gentleman will forgive me, I will not give way, as I want to finish my speech.
We read in The Daily Telegraph today that a group of rather elderly, anti-European business men are setting up a new campaign against European monetary union. Who is to launch their conference? The Leader of the Opposition. Once again, the Europhobic virus is uncontainable in the Conservative party. I see that Conservative Members are waking up and becoming excited at that. We need to sort out our relationship with Europe.

Mr. Paterson: rose—

Mr. MacShane: No, I will not give way. The hon. Gentleman had a chance to speak, and I have given away generously.
I urge Ministers to look hard at what needs to be done for our steel industry.

Mr. Bercow: rose—

Mr. MacShane: I am sorry not to give way, above all to the hon. Gentleman, but I have not given way to his hon. Friends, and I must treat hon. Members equally. I must sit down in a minute or so.
I appeal to the Minister who is to reply to look seriously at what needs to be done to back one of our most modern industries. The British steel industry could set on extra shifts. Last Friday, I met a nuts and bolts manufacturer from the Rotherham-Sheffield border who is hiring new people because the company has the orders. The evidence


about this famous recession is far from clear. If we can get certain parameters of a pro-manufacturing policy in place, our firms will take off.
We are setting targets for education and for health. I would have no problems with the development of a long-term infrastructure target for the United Kingdom. The other day, I was astonished to find that I had to climb up the steps from the tube to King's Cross and on up to St. Pancras station, as there was no escalator. It placed old people, those with children and the wheelchair-bound in an impossible position. Surely there cannot be another railway station in Europe that requires people to climb up on foot. Let us have a proper 10-year infrastructure investment plan.
I am shamelessly patriotic on this subject, so let us also have an encouragement not to fly the flag overseas, as the Department of Trade and Industry and the Foreign Office do that together very well, but to fly it internally, so that, where possible, without breaking tender or competition rules, people can be encouraged to buy British-made products. I was delighted to see that Mr. Paul Smith had one of his suits in Powerhouse UK and would urge all hon. Members to let go of their Armani suits and put away their German—made Boss suits and buy Jasper Conran and Paul Smith. I try to wear Mr. Conran as often as I can—I wish that I could afford to eat in his daddy's restaurants.
We also need cheaper energy prices. That is one of the big problems facing manufacturers and, again, it is an inheritance—I can feel myself being dragged back to the subject of history. The way in which the energy utilities were privatised gave the domestic consumer privileges, but industry was heavily sacrificed.
We also need to encourage partnership politics in industry. I must pay tribute to a union with which I work—the Iron and Steel Trades Confederation, which works well for the British steel industry. In 15 years, it has not had one strike. Unfortunately, all we heard in the debate two or three hours ago was the old adversarial language of them and us—"Treat 'em mean; keep 'em keen"—and hire and fire politics. We need a new approach to partnership in manufacturing industry, particularly in the steel industry.
In conclusion, I must make a rather odd appeal, perhaps one that runs against the adversarial nature of the House, which is that, where possible, we should find common cause, particularly on our relationship with Europe and EMU, and on reforming the way in which our country is governed and administered, so that people in the regions can support manufacturing without some giant development plan, which never works, as we have seen. We should give up the ideology that manufacturing does not count—the ideology that says that only service industries count and that we can live in a weightless cyberworld. We should back our creative industries, but we should not forget that steel exports amounted to four times the exports of all the music industry of the United Kingdom put together.
British steel workers do not smoke dope or snort coke, they are not called Rumbaba and do not dump pails of water over the head of the Deputy Prime Minister, but they are working hard for Britain, just as our car workers are, by exporting £8 billion-worth of steel last year, along the lines of partnership, a positive engagement with

Europe and a commitment to regional development. If my hon. Friend the Minister could encourage those ideas and policies, British manufacturing will win in the next century.

Mr. Tam Dalyell: On a point of order, Mr. Deputy Speaker. Could you draw to Madam Speaker's attention the fact that out of a two and three quarter hour debate, the first hour and three quarters has been occupied by four speeches? Can that be right for the House?

Mr. Deputy Speaker (Mr. Michael J. Martin): That is not a matter for the Chair.

Mr. Charles Wardle: I intend to be brief, but I agree with the hon. Member for Linlithgow (Mr. Dalyell). I do not want to waste too much of my time in responding to the hon. Member for Rotherham (Mr. MacShane), but, in talking about the Bank of England's freedom to set interest rates, he missed the point—the question is not whether allowing the Bank of England that freedom is right, but whether the Government's fiscal policy is aligned with that freedom.
The President of the Board of Trade spoke scornfully about past boom-and-bust cycles, but she gives the same hostage to fortune as the Prime Minister does time and again. Unless they heed the warnings of major—and many smaller and medium-sized—British manufacturing companies about the strength of sterling, they will find themselves in precisely such a cycle.
I remember the 1970s as well as 18 excellent years of Conservative rule. During much of the 1970s, I was involved in manufacturing in the west midlands. Labour Members should remember the conditions that obtained between 1976 and 1979, and remind themselves of a book written by the then general secretary of Association of Scientific, Technical and Managerial Staffs, Clive Jenkins—it was called "The World of Work", I think—in which he predicted, before the winter of discontent and the 1979 general election, that unemployment would rise in the early 1980s to 6 million as a result of the collapse of manufacturing industry. To believe that what happened was all down to Conservative policy is to ignore the facts.
Over the past 25 years, there have been seismic shifts in world manufacturing, prompted by inflation, the technology revolution and the emergence of highly competitive third world and Pacific basin suppliers operating with dramatically lower direct labour costs than have proved possible in the strongest European economies.
In the world recessions of the early 1980s and at the start of this decade, the best British manufacturers survived. They embraced the realities and exploited the advantages that the changing scene presented. Leaner, fitter and hungrier companies thrived in the Conservative climate of market liberalisation, privatisation, less regulation, less Government intervention, high inward investment and—by the mid-1990s, at least—rapid growth in gross domestic product, with low inflation and falling unemployment.
Since last May, however, there have been worrying signs that the positive scenario for British industry that was created by the Conservative Government is being drastically undermined. First, the Government have an


instinct for intervention. Secondly, there are fundamental flaws in their economic policy. Thirdly, they fail even to try to check the European scramble to introduce a single currency without sufficiently stringent disciplines over economic convergence.
New Labour may have consulted its focus groups and learnt that business-friendly noises are what voters want to hear, but the Government's actions have not been business-friendly. Signing up to the social chapter was only the beginning. Social partnership is a euphemism for Government dictating how employees and employers should interact, instead of allowing them to get on with it themselves. Conservative Members will certainly strongly challenge the much-heralded "Fairness at Work" White Paper when it is published next month.
The threat of a return to the bad old days of a Government-enforced system of employee representation in the workplace will destroy hard-won competitiveness and job security. The fact that the Government are pressing ahead with the National Minimum Wage Bill defies belief—unemployment in the rest of the European Union demonstrates the dangers that will befall the British economy if the minimum wage is pitched at anything above a nominal level.
Similarly, the enthusiasm for business improvement districts and town and city improvement zones points to a return to the weaknesses in the previous Labour Government's thinking in the late 1970s, when companies that were arbitrarily excluded from the geography of development zones were tempted to close factories, disrupt local communities and move into those zones because of the artificial inducement of Government subsidies. The only result was that one town's gain was another town's loss, with no obvious benefit to British industry as a whole. Equally, giving local authorities a freer hand on business rates will have a disruptive effect, as it did in the late 1970s.
The proposals for the board membership of regional development agencies will mean that industrialists will be in a minority on those boards, and so unable to prevent the rubber-stamping actions of the RDA directors, who will do the Government's bidding for yet further intervention. Why, for example, change the role of English Partnerships, which has done so well nationally, or be tempted to intervene in the Invest in Britain Bureau? Why suck into the RDAs the job done so well by the Rural Development Commission, which has been so successful in promoting micro-industrial development in rural areas?
Worse still is the Government's assumption that industry will somehow benefit from Government-sponsored working parties. I remember a Minister saying that the Government were seeking ideas about the way in which Britain could become more competitive, but industry needs not another export forum or talking shop, but simply the freedom to get on with its job of wealth creation with as little bureaucratic interference as possible.
Much has been said this evening about economic policy, so I shall be brief. The Government's pre-election pledge not to touch income tax has already begun to look short-sighted. The Chancellor's raid on pension funds and the added cash flow pressure that he has imposed on business—by proposing that advance corporation tax be collected quarterly—were misguided and mistimed. At the

very time that he has given the Bank of England a free hand, he has failed to encourage savings or to dampen consumer demand, much of which is now being directed towards imports that are artificially cheap as a result of the strength of sterling.
The Prime Minister's words at the weekend about helping Japan and the rest of Asia rang hollow. He and the Chancellor seem unprepared to face up to the dangers of an imminent recession in United Kingdom manufacturing that will arise because of their failure to co-ordinate their fiscal policy with interest rate management at the Bank of England, despite the fact that, compared with Japan, Britain relies on exports for twice the percentage of its GDP.
Labour Members seem to suggest that the European single currency will have no effect on British manufacturing industry, but that is not so. The Government's failure to speak out during the UK's presidency of the European Union about the dangers of a headlong rush to monetary union, with insufficient concern about economic convergence, will create a weaker euro, which is bound to be preyed on in the currency markets. The effect will be economic stresses and tensions among member states that are certain to impinge on Britain's trade with the rest of Europe, at the very least.
One has only to imagine the plight of a hypothetical single Pacific currency. It would have been undermined by Japanese economic failure, having first been softened up by the related problems in South Korea, Indonesia, Thailand or Malaysia, and then it would have gone through the floor, dragging down good regional economies along with bad ones. Unless the EU deals with the structural deficiencies in its member economies that are being masked by a lax interpretation of convergence criteria, further trouble lies ahead.
We should also consider the conflict of interest that faces so many EU countries that are determined to introduce the single currency without delay. That is the conflict between growing unemployment and the need for a tougher fiscal stance. Many influential voices in Germany, France and elsewhere in the European Union recognise the rod for their own back that is being created by politicians and bureaucrats hell-bent on political union via monetary union and the single currency.
Our priority should be not scepticism about Britain's fate in the single currency, but the effect on British industry of the economic instability and tension that are bound to follow the first wave of entrants into the single currency if they disregard the prerequisite of genuine economic convergence. The Government's failure to get that message across to our EU partners during Britain's. presidency bodes ill for British industry.
The Government make brave noises, but fail to understand the realities of the sharp end of line management in British industry, and the wealth creation that goes with it. Their failure to resist interventionist temptations, their muddled economic thinking and their inability to say boo to the rest of Europe when boo should be said, will create further problems and destroy British competitiveness.

Mr. Brian Cotter: The Conservatives are to be congratulated on securing this important debate. The Government forecast growth in


manufacturing output this year of only zero per cent. to 0.5 per cent., and with the very strong pound, the risk is that there could even be a mini-recession in manufacturing this year, with falling output. The situation in Asia has increased the risk, and makes it all the more important to debate the prospects for manufacturing industry.
However, that is where my congratulations to the Tories end. No one can forget their record in government over 18 long, hard years. I did not get elected to the House to forget that record, which affected not only my constituents but myself, as managing director of a manufacturing company in the plastics industry.
The nation experienced a severe slump in 1980-81, with substantial exchange rate over-valuation, and a recession in 1990–92. Both busts were caused by irresponsible Conservative policies, and they led to muscle as well as fat being lost from industry. It was hypocritical of the Conservatives to table the motion, when many members of the shadow Cabinet agreed to the implementation of the measures that led to the decimation of manufacturing industry.
The Tory record does not hold up. So bad were the Tories at promoting British manufacturing that, in 1993, after 14 years of Tory rule, manufacturing output was at the same level as it had been 20 years earlier, in 1973. Between 1979 and 1981, manufacturing output fell by 18 per cent. in real terms. There had not been a similar collapse in industrial output since 1920-21. All that from a party that has consistently claimed that the economy is safe only in its hands.
The facts get worse. The motion refers to employment in manufacturing industry, but the hard fact is that manufacturing employment fell by 2.682 million jobs between 1979 and 1996; four jobs in every 10 disappeared under the Tories, yet they call on the Government to change policies
before factories close and jobs are lost.
If we Liberal Democrats did not know better, the startling arrogance of the official Opposition would almost beggar belief. This is not the first occasion in this Parliament when they have made U-turns on policies.
Those statistics represent the average. Let us consider the worst years. In 1980–81, 650,000 manufacturing jobs were lost; in 1982, another 320,000 were lost; and in 1983, another 307,000 went down the drain. In only three years, an astonishing 1.277 million jobs were lost in manufacturing.
Mrs. Thatcher's monetarist policies created those losses, and many of the current shadow Cabinet supported them at the time. In 1981, she said:
Of course I am deeply concerned about the plight of the unemployed and those businesses which are suffering severely. We shall do everything we can to help them. What we cannot do is change our essential strategy.
It was a strategy for job losses. It was her inflexibility that caused so many to suffer. The Government should learn from her crucial mistakes.
Those episodes were caused largely by exchange rate over-valuation and instability. In the early 1980s, sterling rose by 18 per cent. against the deutschmark, in spite of higher UK inflation. That is why the Liberal Democrats

regard the current situation so seriously. In the past 18months, sterling has risen 30 per cent. on a trade-weighted basis, which has had a profound effect on our manufacturing industry.
Figures released today show that manufacturing output is down. In the three months to February, output fell by 0.5 per cent. compared with the previous three months. Just over half manufacturing industries have shown decreases in production, as I know from my company. There was a 1.8 per cent. decrease in the output of the textiles, leather and clothing industries; 1.6 per cent. in chemicals and man-made fibres; and 1 per cent. in the pulp, paper, printing and publishing industries. The signs of impending danger are there. The Government have a duty to listen seriously to the manufacturing industries, and to take action to avoid a devastating repeat of 1980–81 and 1990 to 1992.
The Government talk much about stability. We welcome operational independence for the Bank of England, and the fiscal stability code. Both those policies were in our manifesto, if not in Labour's. We applaud the Government for adopting our policies. Meanwhile, the Tories are hopelessly incoherent on the Bank of England. They have already been asked, and I ask again, whether they would take back political control over interest rates. We would like to hear their answer. The former Conservative Chancellor berates the new monetary system in the UK while supporting the single currency, which would also require an operationally independent central bank.
The Tories clearly have much thinking to do, but so do the Government. To tax and interest rate stability, we must add exchange rate stability. That is why a clear decision for early economic and monetary union entry would be advantageous to Britain and to industry.

Mr. Flight: Not at this rate.

Mr. Cotter: Such a decision would cap the pound's rise and help industry. Businesses are irritated by the lack of a clear timetable for the single currency. The hon. Gentleman says, "Not at this rate." Had the steps I described been taken at the right time, we would not have the present rate.
The Government should have done a better job on fiscal policy. They claim to have tightened fiscal policy, but most of those measures will not cool the consumer boom in the short term. Raising extra taxes on savings and businesses may seem like good policies, but they are bad economics.
The consumer taxes that the Chancellor has spoken of are modest, or offset by other measures. When asked by the Treasury Select Committee last week to list the actions that he has taken to dampen consumer demand, he could point only to a reduction of mortgage tax relief, which is only just taking effect; a reduction in tax relief via the married couple's allowance, which will take place in 1999; higher stamp duty on highly priced properties; and a higher petrol tax.
Those measures will have only a limited effect on consumer demand. We are back to having only one mechanism. Interest rates alone are being used to dampen the economy, at the cost of a stronger pound and higher costs on industry.
Is the Chancellor feeling somewhat chastened after strong criticism from the Engineering Employers Federation? If not, he should be. The EEF is right to say that the Treasury is "not listening enough" to industry about the damage that the strong pound is doing to UK manufacturers. The EEF also agrees that the problem should be tackled through taxes targeted at the consumer—otherwise, it predicts, up to 50,000 jobs will be lost in the engineering sector alone.
What should the Government do? We Liberal Democrats have consistently argued that money should be devoted towards training and education. The hon. Member for Rotherham (Mr. MacShane) made a constructive speech, the tenor of which we can support. He spoke about crossing the political boundaries to come up with solutions, the importance of training and education, and the important role that rural development agencies should have in future in regeneration at local level. He also spoke of adopting a rational approach to the European Community.
I fully support many other initiatives, including the foresight initiative, which links science and technology with industry, although many are now saying that it is underfunded. I am glad to see the Government embarking on a programme to help small businesses with exports, but we Liberal Democrats believe that, overall, the Government should have made a stronger commitment toward a single currency.
I could make other constructive points, but I conclude by saying that tonight we have debated a cynical motion from a party that has neither principle or policy. The Conservatives' suggestion that labour standards should be undermined is unacceptable to Liberal Democrats. It may be a bitter pill for the Tories to swallow, but the previous Conservative Government were responsible for much of the decline of manufacturing industry.
However, the Labour Government must learn that flexibility is not a weakness; they must learn to listen, and to change course if a disaster for our manufacturing industry is to be averted. The Chancellor needs to get to grips with a problem that requires the minds and application of politicians of all persuasions, people in industry, trade unions, the City and every other institution that is engaged in productive activity. These are early days for the Labour Government, and they have a chance to develop our economy to support manufacturing industry. We shall judge them on their record, and on their response to the situation we face today.

Dr. Nick Palmer: I have noticed in previous debates on industry the curious fact that few leading Conservatives have any personal experience of manufacturing industry. Let us look at the backgrounds of the six signatories to the motion in the dim and distant days before they fell on evil times and became professional Conservatives.
The Leader of the Opposition, the right hon. Member for Richmond, Yorks (Mr. Hague), was a business consultant. The shadow Chancellor, the right hon. Member for Hitchin and Harpenden (Mr. Lilley), was an oil analyst. The shadow President of the Board of Trade, the right hon. Member for Wokingham (Mr. Redwood), was an investment adviser. The right hon. and learned Member for Folkestone and Hythe (Mr. Howard) was a

barrister, as was the hon. Member for North-East Hampshire (Mr. Arbuthnot). The right hon. Member for Wells (Mr. Heathcoat-Amory) was a farmer, an accountant and a finance director.
All those professions are extremely respectable—if I had a daughter who wanted to marry one of them, I should say, "By all means. My son-in-law the oil analyst—why not?"—but it is curious that the parliamentary Conservative party is unable to find a single manufacturer in its ranks to sign the motion.
That might explain why the previous Government and the current shadow Cabinet have managed to get so far out of touch with British industry. I shall not go into the question of sterling, because almost all the other speakers have addressed it; but I have spoken with many managers in Broxtowe, and I should like to say a couple of words about the other points on the charge sheet assembled by the Opposition.
The motion claims that managers are worried about taxes, but not one of the Broxtowe managers to whom I spoke cited tax as an issue that worried them—on the contrary, they feel that the reduction in corporation tax is helpful to industry. Taxation does not appear to be a problem for them.
The motion also alleges that managers are alarmed by social and labour law legislation. None of the Broxtowe managers has evinced any such concern, with the exception of a firm run by an exclusive Christian group called the Brethren, which believes that the Bible forbids it to recognise trade unions. If Conservative Members wish to promote that group, that is fine, but I have not heard them mention it. Perhaps they are saving that argument for the wind-up speech.
The hon. Member for South-West Hertfordshire (Mr. Page) made an interesting point. He said that he wondered whether, in the present regime, overseas companies would wish to pursue inward investment in Britain.
Unlike the sponsors of the motion, I have recent experience of management in a large overseas-based multinational manufacturing company. I spoke to the chairman after seeing advertisements placed in the local press by the former Conservative Government, which said that companies should invest in Britain because our wage rates were low and there were few restrictions on employers.
I felt a little ashamed that we should be openly advertising ourselves as an ideal home for sweatshops, but I asked the chairman whether those arguments would persuade him to increase UK investment. His reply was revealing. He said that, other things being equal, lower wage rates were welcome, but that, at that time, there were two problems in Britain which were significant barriers to investment: the poor state of infrastructure, especially in the universities; and the low average quality of education, which made it hard to get the staff needed for high-quality precision manufacturing.
Given that background, I whole-heartedly welcome the new Government's focus on creating an environment for education and training that surpasses that of our foreign competitors. I particularly welcome the emphasis on support for research and development, which the Minister for Science, Energy and Industry has made his own.
British business needs four things from Government, regardless of the Government's political complexion. First, it needs a stable economic environment focused on


long-term growth, as emphasised so many times by the Chancellor. Secondly, it needs an education system that delivers the expertise needed for competitiveness. That is the focus of the policies put forward by the Department for Education and Employment. Thirdly, it needs a financial environment that rewards enterprise and venture capital investment, as stressed by the Minister for Small Firms, Trade and Industry when we debated that matter a few weeks ago. Finally, it needs a social and environmental policy framework that makes clear what is expected of it, and is not subject to constant change. That is another commitment of this Government.
The new Labour Government are committed to all four elements, which is why business in Broxtowe, as in Britain in general, is predominantly behind the Government as they take our country into a future that matches the industrial glories of the past.

Mr. David Heathcoat-Amory: It was kind of the hon. Member for Broxtowe (Dr. Palmer) to go into the biographical details of those who signed the motion, but he was wrong to assert that none of us has manufacturing experience. He mentioned that I have a business background, but I spent 10 years in manufacturing before coming to this House, and am now a director of a manufacturing company, an interest that I am proud to declare in such a debate.
More generally, almost all my right hon. and hon. Friends who signed the motion have more manufacturing and business experience than the entire Department of Trade and Industry Front Bench. Therefore, Conservative Members think that we know what we are talking about, and we have heard some excellent speeches from my right hon. and hon. Friends this evening.
We have on our hands a betrayal of everything for which Labour said they stood when in opposition. We are used to broken promises from Labour on taxation, but their betrayal of the manufacturing interest is probably the greatest. When they were in opposition, no speech made by Labour Members was complete without reference to the central importance of the manufacturing sector. They always called for lower interest rates, more investment, intervention of one sort or another, but now that they are in office, they have no strategy whatever. That has been noticed not just by hon. Members on the Opposition Benches, but more generally.
I was interested in a debate in another place last week, in which Lord Paul—a new Labour peer—finished his speech by saying:
There is a cynicism creeping into the minds of UK manufacturers that this Government are indifferent to the fate of manufacturing industry".—[Official Report, House of Lords, 1 April 1998; Vol. 587, c. 298.]
That has been shown again this evening.
The President of the Board of Trade, in her somewhat petulant and shrill speech, showed that she had no idea whether she was on the side of those who still believe manufacturing to be important, or whether she thinks that manufacturing is no longer sufficiently cool to engage the interest of Ministers. I personally thought that it was one of the weakest performances from the Dispatch Box that

I have ever heard on a subject of this importance. It showed the shallowness of the Government's entire approach. They have no strategy.
On reflection, perhaps we should not be too surprised at that, because one of the first things that the Government did, four days after the general election, was to give away the power to decide interest rates—a central lever of the economy. When the Chancellor of the Exchequer transferred the decision-making power to the Bank of England, he did so without telling the House, without consulting anyone outside, and in defiance of what was in the Labour manifesto.
In Labour's business manifesto, which we all know was more important than their main manifesto—

The Minister for Science, Energy and Industry (Mr. John Battle): rose—

Mr. Heathcoat-Amory: I give way to the Minister.

Mr. Battle: Will the right hon. Gentleman say whether he prefers that decision? Is it not the case that many companies, including his own, welcome it?

Mr. Heathcoat-Amory: I shall come to the attitude of companies in a moment. I make the point—it is interesting that the Minister does not deny this—that, in its business manifesto, Labour said that it would set up an advisory committee in the Bank of England, but that decisions would continue to be taken by the Treasury; so it was another broken promise when, four days after the general election, the Chancellor transferred these powers to the Monetary Policy Committee of the Bank of England, in advance of any legislation.
We warned of the dangers, and the confusion that we predicted in the Monetary Policy Committee has occurred. It has broken up into two unarmed camps: the hawks and the doves. The hawks believe that further increases in interest rates are required. The doves believe that interest rates should remain the same.
The Monetary Policy Committee's discussions are conducted semi-publicly, but it has raised in the minds of economic commentators and the markets the probability of further interest rate rises to come, which has further strengthened the pound and further damaged exporters and the manufacturing sector generally. That point was graphically made by my hon. Friend the Member for South-West Hertfordshire (Mr. Page), who has long experience of these matters. We are the fifth biggest trading nation in the world, and markets that are relinquished by the failure to compete on price are difficult to re-establish.

Dr. Palmer: Will the right hon. Gentleman give way?

Mr. Heathcoat-Amory: Will the hon. Gentleman forgive me? He has made his speech. I hope to reply to some of his points in due course.
There are reports that the Government, and more specifically the Cabinet, have split on this issue into those who still believe that something should be done about manufacturing, and those who do not. The attitude of the President of the Board of Trade remains a mystery.
We also warned at the time that there was a danger that monetary policy would diverge from fiscal policy; that the MPC would have an overriding concern to counter inflation by higher interest rates, while the Chancellor and the Government would pull policy in another direction. Those warnings came not just from my party, but from other parties. Indeed, I recognise one or two Labour Members who made precisely the same points.
The Government did not listen. That is hardly surprising, because Labour Members do not take the House seriously any more: they never attend debates such as this. But it has happened again. There is now a divergence between what the Chancellor, in two Budgets, has done in regard to taxation—and in regard to savings in particular—and what the Monetary Policy Committee is trying to do in the Bank of England.
In those two Budgets, we have seen an attack on savings. The £5 billion raid on pension funds—which is now to be an annual event—is the precise opposite of what the Government should have done last year. They should have encouraged savings, especially in the light of the huge windfalls that consumers were receiving from building societies and insurance companies following flotations.
The Government compounded the problem with the muddle over tax-exempt special savings accounts and personal equity plans. They relented on that, and we had a U-turn; but individual savings accounts will still be subject to an annual limit that is less than half what people can currently save through PEPs and TESSAs. By taxing savings and deterring savers, the Government put all the burden of the anti-inflation strategy on to the Bank of England. That is why we have had five interest rate rises since the election, and an uncompetitively high pound. It has been bad for mortgage holders, bad for investment and bad for exporters.
All that is described in the finer print of the Red Book—the Financial Statement published at the time of the Budget. It is laid out in the Red Book that the savings ratio is
expected to decline over the next three years.
The Red Book also mentions business investment, about which we have heard so much criticism this evening. Apparently it has been
rising as a share of GDP since 1994.
So much for the assertion that it fell constantly during our term of office.
The Red Book also states:
Overall, business investment is forecast to decelerate this year".
Decelerate" is one of those wonderful words that actually mean something different. "Decelerate" really means that business investment will be cut this year. It is one of the understatements for which the Treasury is famous.
On page 95, the Red Book says:
the outlook for the traded goods sector is difficult … with imports of goods in the fourth quarter of 1997 up 10¾ per cent. on a year earlier.
There we have it. We know that the Prime Minister has not read the Red Book, but we have. We know from the Chancellor himself that savings are set to decline, that investment is set to decline, that imports are going up, that industry is contracting, and that the Government's inflation targets—even on their own figures—will not be met until the end of next year.
We have a highly distorted economy. Services and consumption are buoyant, while manufacturers and exporters are on the brink of a recession. In today's debate, one or two hon. Members said that everything would be all right, because we now have stability. Indeed, the Chancellor has said more than once that he wants to end the cycle of boom and bust. He has done so by having both simultaneously: we have a boom in the consumer market, and a potential bust—certainly, we are on the brink of a bust—in the manufacturing and exporting sector.
There is another point, which again has been made by my hon. Friends. According to the Governor of the Bank of England, about half the rise in sterling can be attributed to the weakness of the euro. In other words, sterling is now a currency of refuge. Quite simply, a fudged euro will be a weak euro, which means a relatively strong pound.
What are the Government doing? Nothing. Despite holding the six-month presidency of the European Union, neither the Prime Minister nor the Chancellor of the Exchequer shows the slightest interest in ensuring that the treaty convergence criteria are adhered to. The Bundesbank report lays out the fudging in graphic detail. Italy will have to run a budget surplus of 2.2 per cent. for the next 10 years to reach the required 60 per cent. debt level, but it is not even planning a balanced budget, so the chance of meeting the entry criteria is extremely remote.
The Prime Minister says that a range of criteria must be considered. Cannot the Government understand that fudging the entry criteria may do terrible, or even irreparable, damage to our manufacturing industry? If the Prime Minister and the Chancellor do not at least try to insist during their chairmanship of meetings that treaty requirements must be adhered to, we shall conclude that their reputation as European fixers is more important than their aim of preventing damage to the constituent economies of the European Union or that of the United Kingdom.
Damage is caused directly to the manufacturing sector not by the high value of the pound, but by taxation and regulations. My hon. Friend the Member for Bexhill and Battle (Mr. Wardle) graphically described the damage caused by over-regulation. I must mention the £20 billion extra tax burden on British industry laid out for the duration of this Parliament, the pensions tax, the early instalments of corporation tax, the double increase in diesel duty, and the stamp duty increases, all of which hit businesses harder than home owners and add to the burdens on the manufacturing sector when the Government have announced a welfare-to-work programme that relies on such firms to deliver jobs.
The Government have the cheek to claim credit for the competitiveness, flexibility and success that British firms have built up over the past 18 years, but trade union reforms, privatisations and the creation of a dynamic and flexible labour market were opposed throughout by the Labour party. The only reform or policy it supported was our entry of the exchange rate mechanism. The Conservative party has learnt the lesson about that, but the Labour party has not.
The Government have been lucky. They have inherited a golden legacy, but their response is to tax savings and businesses, to regulate and to interfere. Alongside that is


neglect of and indifference to the damage that is being caused by the strength of the pound—almost fatalism about it.
If there is even a vestigial concern among Labour Members about the manufacturing sector, they should show it by joining us in the Lobby.

The Minister for Science, Energy and Industry (Mr. John Battle): After 11 years as a Member of Parliament, I am amazed at the Opposition's new-found interest in manufacturing—although it is welcome.
Conservative Members have used the word "manufacturing" as a cover for a debate on the euro: most of the speech of the hon. Member for Bexhill and Battle (Mr. Wardle) was against the single European currency, and the right hon. Member for Wells (Mr. Heathcoat-Amory) resigned as a Treasury Minister before the last election because he disagreed with the then Chancellor's policy—but tonight he said how marvellous it was. After a cursory introductory reference to manufacturing, the shadow President of the Board of Trade moved on to his usual hang-up with the euro. The debate has been a run-out for the Eurosceptics, in case they find that their leader is backsliding again. It is a little late in the day for Conservative Members to promote manufacturing, given the fact that, for almost two decades, they deliberately ran down, if not wrote off, the manufacturing sector.
The hon. Member for South-West Hertfordshire (Mr. Page) was a Minister at the Department of Trade and Industry. In my 10 years in the House, I do not recall him mentioning the word "manufacturing" in his speeches, yet he claims that he regularly reminded us that manufacturing created the wealth that the nation needed.

Mr. Page: Would it be convenient for me to send the hon. Gentleman copies of all my speeches on manufacturing, and would he please acknowledge receipt of them?

Mr. Battle: As the President of the Board of Trade said, one or two lone voices in the Conservative party spoke up for manufacturing, but the hon. Gentleman was not one of them. I should be delighted to receive the full raft of his speeches in the House on manufacturing, because I am confident that he did not make many.
When the noble Lord Young was Secretary of State for Trade and Industry, he was challenged on Tory policies that undermined manufacturing. In my own city of Leeds, engineering, printing and textiles provided employment for more than 100 years. In the early 1980s, he advised great manufacturing centres such as Leeds to abandon manufacturing and to concentrate on services. His immortal words were that the centres of manufacturing would thrive if only more people would eat out. That was his policy. He advised us that we would economically survive by cutting each other's hair and eating at McDonald's. In the meantime, there was a slump in manufacturing from 52 per cent. of the economy to 22 per cent.
I am glad that, late in the day, the Conservatives are telling us that manufacturing is crucial to economic prosperity. We have known that for decades. Some of the

industries to which my hon. Friend the Member for Rotherham (Mr. MacShane) referred were written off by the Tories as traditional, but the steel industry has moved towards the 21st century with new technology. What did we get from 18 years of Conservative government? We had bust, boom and bust again: short-term expediency rather than long-term commitment. Manufacturing under the Tories was hammered by two savage recessions, and damaged by an unsustainable boom in between.
The Tories kept telling us that their macro-economic policy was set within a medium-term financial strategy. The problem with the objectives of their monetary and fiscal policies was that they changed with bewildering frequency. Nowhere was their confusion greater than on the subject of exchange rates. First Chancellor Nigel Lawson went, and then Norman Lamont resigned. The Tories believed that the exchange rate would find its own level, and that it was an important indicator of monetary conditions. That led to the shadowing of the deutschmark. Then they argued that we could not buck the market, and they joined the exchange rate mechanism. Two years later, we were ejected from the ERM at a cost to the country of £10 billion in a single afternoon. They now have the nerve to tell us about economic policy.
As a result of the confusion, the pound went on a rollercoaster ride. Under two Prime Ministers and four Chancellors, the rate of sterling against the deutschmark changed a mere 87 times. That is the Tory record.

Mr. Hammond: Does the Minister acknowledge that there is an immediate problem for manufacturing industry? What advice would he give to manufacturing companies that are on the brink of having to make substantial redundancies because they are becoming uncompetitive? That is happening now, not in history.

Mr. Battle: I shall willingly deal with the hon. Gentleman's point if he will allow me to continue my speech. We should put it clearly on the record where the Conservative party comes from, because the boom and bust cycle that it created between 1989 and 1993 cost us 1 million manufacturing jobs. The last thing that the industry wants now is a return to those short-term, boom-bust, stop-go policies of the past.
The Conservative Government did little to promote manufacturing, and many of their actions were damaging. As a result of 18 years of Conservative Government, manufacturing shrank by a quarter in relation to the economy as a whole. Some 2.5 million jobs were lost, and the Conservative Government were totally indifferent to that. They did not say a word about manufacturing.
Of course we fully recognise the worries of manufacturers about the current exchange rate. I met representatives of the worsted textile industry in my constituency on Saturday. We appreciate that they are under pressure, but it is accepted that we need a stable and competitive framework over the medium and longer term. We have the right policies to achieve that. I recall the freely given and much publicised expert advice in the months before the general election. What did all the experts advise and agree on? They claimed that the only certainty other than death if a Labour Government were elected was that the pound would sink. They said that it would go through the floor.
The experts all predicted a fall in the pound consequent on the election of a Labour Government. To be fair, there was some precedent. Every previous Labour Government have come under incredible economic pressure, and everyone expected downward pressure on the pound. Conservative Members spelled that out day after day in the election campaign. What has happened? Who predicted that a Labour Government would face the problem of the pound being too strong?
The Conservatives do not know where they stand on the issue. On 30 October 1989, just after Nigel Lawson resigned, the then Prime Minister, now Baroness Thatcher, declared on television:
I like a strong pound.
Now the shadow President of the Board of Trade campaigns for a weak pound, but at that time, he claimed that Baroness Thatcher was right. He has obviously changed his mind. Conservative Members with their selective amnesia seem to forget that sterling's value against the deutschmark increased by 20 per cent. between May 1996 and May 1997. Some 70 per cent. of the present increase is due to the actions of the Government at that time, and, of course, we have inherited that sterling time bomb.

Mr. Graham Brady: I am sorry to interrupt the Minister's rampage through history. Is he not aware—I presume from his complacent performance that he is not—that some of my constituents with businesses in Trafford Park are already laying people off because of the Government's policies? They will not be satisfied by the complacent remarks of the Secretary of State and the Minister. Will the Minister tell us what the Government intend to do about that problem?

Mr. Battle: Some of us recall the lay-offs in Trafford Park under the previous Government. No doubt the hon. Gentleman will remember the words of a former Conservative Chancellor who, just before the election, said:
We have a floating exchange rate at the moment and, for that reason, I do not control its level. Finance Ministers do not control the level of exchange rates in today's deregulated … markets."—[Official Report, 13 March 1997; Vol. 292, c. 491-92.]
We are entitled to ask Opposition Members whether they agree with that or whether they now take a different view. As usual, they are at sixes and sevens. Some of them say, "Join the EMU early," while others are mortally opposed. Some say, "Put taxes up," while others say, "Put taxes down." Some say, "We want further fiscal tightening," while others say, "Not any more." They are all over the place—deeply divided, uncertain and never sure which way to face. Their position is muddled, inconsistent and incredible.

Mr. Paterson: The Minister's historical rant is simply not good enough. [Interruption.] People working in businesses and on farms are worried sick that they will become unemployed because the Minister and the Secretary of State will not give the Chancellor a clear recommendation about what will do manufacturing good. At what level would they like to see the exchange rate?

Mr. Battle: I seem to recall that today's debate is on an Opposition motion.
In 1995, the right hon. Member for Wokingham (Mr. Redwood)—during his perennial leadership campaign—said:
at my first Cabinet meeting, I'd ask what could we cease doing".
After demonstrating that smack of firm, threatening leadership, he went on to declare:
Those who answer well will have good prospects under me.
There we have it. The right hon. Gentleman may regale us with his empty rhetoric, but he will do nothing.
What action would the right hon. Member for Wokingham take? He mutters about savings, but—despite those mutterings—the personal savings ratio is rising under our Labour Government. Would he tighten even further the Government's fiscal stance, and cut spending on education and health? Is that what he is telling us? Would he increase personal taxation? He is a do-nothing man, whose practical advice is worthless.

Mr. Heathcoat-Amory: The hon. Gentleman mentioned the savings ratio. May I refer him to the Government's own document—the Red Book—which clearly shows the savings ratio peaking in 1997, falling in 1998, falling further in 1999 and falling even further in 2000, when it runs off the map?

Mr. Battle: That intervention was made by a man who was a Minister in a Government under whom savings fell to 6 per cent. Tell us about it.
The Government understand the worries of manufacturers. Moreover, since day one, we have been providing an environment in which businesses can prosper. We have cut the main corporation tax rate and exempted small and medium-sized companies—about which some hon. Members have expressed some concern in this debate. We have reformed capital gains tax, and established a new enterprise investment scheme. We are investing in skills and training, and have established a university for industry. We have also introduced a university challenge fund. We are introducing major initiatives to get investment in research and development and to encourage longer-term investments. We shall stick with our strategy, and not be bounced by cribbing Conservative Members—who have not a clue what to do, and cannot even make up their own minds.
Long-term investment rates are already lower, and manufacturing output is holding up. Yes, although we share some concerns with industry, we are determined to build a stable economic framework and to break the boom-bust cycle.

Mr. David Prior: Will the hon. Gentleman give way?

Mr. Battle: No.
I should like to know how Conservative Members have the gall, nerve and bare-faced cheek even to mention manufacturing. The right hon. Member for Wells mentioned cynicism. However, Conservative Members—who belong to a party that is without principle or policy—have tabled a cynical and opportunist motion. Conservative Members cannot even make up their minds what to do on those matters. For them to table that motion really takes the biscuit. In


government, Conservative Members worked to eliminate manufacturing, although they did not mention that today.
I got the impression from the speech of the shadow President of the Board of Trade that he wants to set our exchange rate in a vacuum, as if we could do that in the context of a world economy. Such a desire is simply bizarre, and a case of, "Don't adjust your brain; there's a fault in reality."
Our policies are designed to rebuild our manufacturing base and to ensure that it has a future. I hope that hon. Members will reject the cynical words in the Opposition's motion, which are simply a cover to allow the Eurosceptics another ride. Conservative Members' interest in manufacturing is as shallow as the words of their motion.
I urge hon. Members to vote for the Government's amendment, which states how our policies will rebuild our manufacturing base and establish skills and training, which are a factor in our manufacturing's ability to compete. Our policies will ensure that there is investment in research and development, which declined under the previous Government. They left office with less investment in research and development than when they came to power. It is our policies that will rebuild our manufacturing base and ensure that it has a future, not the cynical opportunism that we see in the Conservative party motion. I recommend the amendment in the name of my right hon. and hon. Friends.

Question put, That the original words stand part of the Question:—

The House divided: Ayes 135, Noes 333.

Division No. 245]
[9.59 pm


AYES



Ainsworth, Peter (E Surrey)
Clifton-Brown, Geoffrey


Amess, David
Collins, Tim


Ancram, Rt Hon Michael
Colvin, Michael


Arbuthnot, James
Cormack, Sir Patrick


Atkinson, David (Bour'mth E)
Cran, James


Atkinson, Peter (Hexham)
Davies, Rt Hon David (Haltemprice)


Baldry, Tony
Day, Stephen


Bercow, John
Dorrell, Rt Hon Stephen


Beresford, Sir Paul
Duncan, Alan


Blunt, Crispin
Emery, Rt Hon Sir Peter


Body, Sir Richard
Faber, David


Boswell, Tim
Fabricant, Michael


Bottomley, Peter (Worthing W)
Fallon, Michael


Bottomley, Rt Hon Mrs Virginia
Flight, Howard


Brady, Graham
Forth, Rt Hon Eric


Brazier, Julian
Fowler, Rt Hon Sir Norman


Brooke, Rt Hon Peter
Fraser, Christopher


Browning, Mrs Angela
Gale, Roger


Bruce, Ian (S Dorset)
Garnier, Edward


Burns, Simon
Gibb, Nick


Butterfill, John
Gill, Christopher


Cash, William
Gillan, Mrs Cheryl


Chapman, Sir Sydney
Gorman, Mrs Teresa


(Chipping Barnet)
Green, Damian


Chope, Christopher
Greenway, John


Clappison, James
Grieve, Dominic


Clark, Rt Hon Alan (Kensington)
Hague, Rt Hon William


Clark, Dr Michael (Rayleigh)
Hamilton, Rt Hon Sir Archie


Clarke, Rt Hon Kenneth
Hammond, Philip


(Rushcliffe)
Hawkins, Nick





Hayes, John
Prior, David


Heathcoat-Amory, Rt Hon David
Randall, John


Horam, John
Redwood, Rt Hon John


Howard, Rt Hon Michael
Robathan, Andrew


Howarth, Gerald (Aldershot)
Robertson, Laurence (Tewk'b'ry)


Hunter, Andrew
Roe, Mrs Marion (Broxbourne)


Jack, Rt Hon Michael
Rowe, Andrew (Faversham)


Jackson, Robert (Wantage)
St Aubyn, Nick


Jenkin, Bernard
Sayeed, Jonathan


Johnson Smith,
Shephard, Rt Hon Mrs Gillian


Rt Hon Sir Geoffrey
Shepherd, Richard


Key, Robert
Simpson, Keith (Mid-Norfolk)


King, Rt Hon Tom (Bridgwater)
Soames, Nicholas


Laing, Mrs Eleanor
Spring, Richard


Lait, Mrs Jacqui
Stanley, Rt Hon Sir John


Lansley, Andrew
Steen, Anthony


Leigh, Edward
Streeter, Gary


Letwin, Oliver
Swayne, Desmond


Lewis, Dr Julian (New Forest E)
Syms, Robert


Lidington, David
Tapsell, Sir Peter


Loughton, Tim
Taylor, Ian (Esher & Walton)


Luff, Peter
Townend, John


Lyell, Rt Hon Sir Nicholas
Tredinnick, David


MacGregor, Rt Hon John
Trend, Michael


McIntosh, Miss Anne
Tyrie, Andrew


Maclean, Rt Hon David
Viggers, Peter


McLoughlin, Patrick
Walter, Robert


Madel, Sir David
Wardle, Charles


Major, Rt Hon John
Waterson, Nigel


Mates, Michael
Wells, Bowen


Maude, Rt Hon Francis
Whitney, Sir Raymond


Mawhinney, Rt Hon Sir Brian
Widdecombe, Rt Hon Miss Ann


May, Mrs Theresa
Wilkinson, John


Moss, Malcolm
Willetts, David


Nicholls, Patrick
Winterton, Mrs Ann (Congleton)


Norman, Archie
Yeo, Tim


Ottaway, Richard
Young, Rt Hon Sir George


Page, Richard



Paice, James
Tellers for the Ayes:


Paterson, Owen
Mr. John M. Taylor and


Pickles, Eric
Mr. Oliver Heald




NOES


Adams, Mrs Irene (Paisley N)
Browne, Desmond


Ainger, Nick
Burden, Richard


Alexander, Douglas
Burgon, Colin


Allan, Richard
Butler, Mrs Christine


Allen, Graham
Caborn, Richard


Anderson, Janet (Rossendale)
Campbell, Alan (Tynemouth)


Armstrong, Ms Hilary
Campbell, Mrs Anne (C'bridge)


Ashton, Joe
Campbell, Menzies (NE Fife)


Atherton, Ms Candy
Campbell, Ronnie (Blyth V)


Atkins, Charlotte
Campbell-Savours, Dale


Baker, Norman
Canavan, Dennis


Ballard, Mrs Jackie
Cann, Jamie


Barnes, Harry
Caplin, Ivor


Battle, John
Casale, Roger


Beard, Nigel
Caton, Martin



Beckett, Rt Hon Mrs Margaret
Chapman, Ben (Wirral S)


Begg, Miss Anne
Chidgey, David


Beith, Rt Hon A J
Chisholm, Malcolm


Bell, Stuart (Middlesbrough)
Church, Ms Judith


Benn, Rt Hon Tony
Clapham, Michael


Bennett, Andrew F
Clark, Rt Hon Dr David (S Shields)


Benton, Joe
Clark, Dr Lynda


Bermingham, Gerald
(Edinburgh Pentlands)


Berry, Roger
Clark, Paul (Gillingham)


Best, Harold
Clarke, Eric (Midlothian)


Blears, Ms Hazel
Clarke, Rt Hon Tom (Coatbridge)


Blizzard, Bob
Clelland, David


Bradley, Keith (Withington)
Clwyd, Ann


Bradshaw, Ben
Coaker, Vernon


Brake, Tom
Coffey, Ms Ann


Breed, Colin
Coleman, lain


Brown, Rt Hon Nick (Newcastle E)
Colman, Tony


Brown, Russell (Dumfries)







Connarty, Michael
Hoon, Geoffrey


Cook, Frank (Stockton N)
Hope, Phil


Cooper, Yvette
Hopkins, Kelvin


Corbyn, Jeremy
Howarth, Alan (Newport E)


Cotter, Brian
Howarth, George (Knowsley N)


Cranston, Ross
Howells, Dr Kim


Crausby, David
Hoyle, Lindsay


Cryer, Mrs Ann (Keighley)
Hughes, Ms Beverley (Stretford)


Cummings, John
Hughes, Kevin (Doncaster N)


Cunliffe, Lawrence
Hughes, Simon (Southwark N)


Cunningham, Rt Hon Dr John
Humble, Mrs Joan


(Copeland)
Hurst, Alan



Cunningham, Jim (Cov'try S)
Hutton, John


Dalyell, Tam
Iddon, Dr Brian


Darling, Rt Hon Alistair
Illsley, Eric


Darvill, Keith
Jackson, Ms Glenda (Hampstead)


Davey, Valerie (Bristol W)
Jackson, Helen (Hillsborough)


Davies, Rt Hon Denzil (Llanelli)
Jamieson, David


Davies, Geraint (Croydon C)
Jenkins, Brian


Davies, Rt Hon Ron (Caerphilly)
Johnson, Alan (Hull W & Hessle)


Davis, Terry (B'ham Hodge H)
Jones, Barry (Alyn & Deeside)


Dean, Mrs Janet
Jones, Mrs Fiona (Newark)


Denham, John
Jones, Jon Owen (Cardiff C)


Dewar, Rt Hon Donald
Jones, Dr Lynne (Selly Oak)


Dismore, Andrew
Jones, Martyn (Clwyd S)


Dobbin, Jim
Jones, Nigel (Cheltenham)


Donohoe, Brian H
Kaufman, Rt Hon Gerald


Doran, Frank
Keeble, Ms Sally


Dowd, Jim
Keen, Alan (Feltham & Heston)


Drew, David
Keen, Ann (Brentford & Isleworth)


Dunwoody, Mrs Gwyneth
Kemp, Fraser


Eagle, Maria (L'pool Garston)
Kennedy, Jane (Wavertree)


Edwards, Huw
Kilfoyle, Peter


Ellman, Mrs Louise
King, Andy (Rugby & Kenilworth)


Ennis, Jeff
King, Ms Oona (Bethnal Green)


Fatchett, Derek
Kingham, Ms Tess


Fearn, Ronnie
Kirkwood, Archy


Field, Rt Hon Frank
Kumar, Dr Ashok


Fitzpatrick, Jim
Laxton, Bob


Fitzsimons, Lorna
Lepper, David


Follett, Barbara
Leslie, Christopher


Foster, Rt Hon Derek
Levitt, Tom


Foster, Michael Jabez (Hastings)
Lewis, Ivan (Bury S)


Foster, Michael J (Worcester)
Liddell, Mrs Helen


Foulkes, George
Linton, Martin


Fyfe, Maria
Livsey, Richard


Galbraith, Sam
Llody, Tony (Manchester C)


Galloway, George
Lock, David


Gardiner, Barry
Love, Andrew


George, Bruce (Walsall S)
McAvoy, Thomas


Gerrard, Neil
McCabe, Steve


Gilroy, Mrs Linda
McCafferty, Ms Chris


Godman, Dr Norman A
McCartney, Ian (Makerfield)


Godsiff, Roger
McDonagh, Siobhain


Goggins, Paul
McDonnell, John


Golding, Mrs Llin
McFall, John


Griffiths, Nigel (Edinburgh S)
McGuire, Mrs Anne


Griffiths, Win (Bridgend)
McIsaac, Shona


Grocott, Bruce
McKenna, Mrs Rosemary


Grogan, John
McLeish, Henry


Hall, Mike (Weaver Vale)
McNamara, Kevin


Hall, Patrick (Bedford)
MacShane, Denis


Hamilton, Fabian (Leeds NE)
Mactaggart, Fiona


Hanson, David
McWalter, Tony


Harman, Rt Hon Ms Harriet
McWilliam, John


Heal, Mrs Sylvia
Mahon, Mrs Alice


Heath, David (Somerton & Frome)
Mallaber, Judy


Henderson, Doug (Newcastle N)
Marek, Dr John


Henderson, Ivan (Harwich)
Marsden, Gordon (Blackpool S)


Hepburn, Stephen
Marsden, Paul (Shrewsbury)


Heppell, John
Marshall, Jim (Leicester S)


Hesford, Stephen
Marshall, —Andrews, Robert


Hewitt, Ms Patricia
Martlew, Eric


Hill, Keith
Meacher, Rt Hon Michael


Hoey, Kate
Meale, Alan


Hood, Jimmy






Michael, Alun
Sheerman, Barry


Michie, Bill (Shef?ld Heeley)
Sheldon, Rt Hon Robert



Michie, Mrs Ray (Argyll & Bute)
Singh, Marsha


Milburn, Alan
Skinner, Dennis


Mitchell, Austin
Smith, Angela (Basildon)


Moffatt, Laura
Smith, Miss Geraldine


Moonie, Dr Lewis
(Morecambe & Lunesdale)


Moore, Michael
Smith, John (Glamorgan)


Moran, Ms Margaret
Smith, Llew (Blaenau Gwent)


Morgan, Rhodri (Cardiff W)
Smith, Sir Robert (W Ab'd'ns)


Morley, Elliot
Snape, Peter


Morris, Ms Estelle (B'ham Yardley)
Southworth, Ms Helen


Morris, Rt Hon John (Aberavon)
Spellar, John


Mountford, Kali
Squire, Ms Rachel


Mudie, George
Starkey, Dr Phyllis


Mullin, Chris
Steinberg, Gerry


Murphy, Denis (Wansbeck)
Stevenson, George


Murphy, Jim (Eastwood)
Stewart, David (Inverness E)


Norris, Dan
Stewart, Ian (Eccles)


Oaten, Mark
Stinchcombe, Paul


O'Brien, Bill (Normanton)
Stoate, Dr Howard


O'Hara, Eddie
Stott, Roger


Olner, Bill
Stringer, Graham


O'Neill, Martin
Stuart, Ms Gisela


Öpik, Lembit
Stunell, Andrew


Organ, Mrs Diana
Sutcliffe, Gerry


Palmer, Dr Nick
Taylor, Rt Hon Mrs Ann


Pearson, Ian
(Dewsbury)


Pendry, Tom
Taylor, Ms Dari (Stockton S)


Perham, Ms Linda
Thomas, Gareth R (Harrow W)


Pickthall, Colin
Tipping, Paddy


Pike, Peter L
Todd, Mark


Plaskitt, James
Touhig, Don


Pope, Greg
Trickett, Jon


Powell, Sir Raymond
Truswell, Paul


Prentice, Ms Bridget (Lewisham E)
Turner, Dennies (Wolverh'ton SE)


Prentice, Gordon (Pendle)
Turner, Dr George (NW Norfolk)


Prescott, Rt Hon John
Twigg, Derek (Halton)


Primarolo, Dawn
Twigg, Stephen (Enfield)


Quin, Ms Joyce
Tyler, Paul


Quinn, Lawrie
Vaz, Keith


Rapson, Syd
Vis, Dr Rudi


Raynsford, Nick
Wallace, James


Reed, Andrew (Loughborough)
Walley, Ms Joan


Reid, Dr John (Hamilton N)
Wareing, Robert N


Rendel, David
Watts, David


Robertson, Rt Hon George
Wicks, Malcolm


(Hamilton S)
Williams, Rt Hon Alan


Rogers, Allan
(Swansea W)


Rooker, Jeff
Williams, Alan W (E Carmarthen)


Rooney, Terry
Williams, Mrs Betty


Rowlands, Ted
Winnick, David


Roy, Frank
Winterton, Ms Rosie (Doncaster C)


Ruane, Chris
Wise, Audrey


Ruddock, Ms Joan
Wood, Mike


Russell, Bob (Colchester)
Woolas, phil


Russell, Ms Christine (Chester)
Wray, James


Ryan, Ms Joan
Wright, Anthony D (Gt Yarmouth)


Salter, Martin



Savidge, Malcolm
Tellers for the Noes:


Sawford, Phil
Mr. Clive Betts and


Sedgemore, Brian
Mr.Robert Ainsworth.

Question accordingly negatived.

Question, That the proposed words be there added, put forthwith, pursuant to Standing Order No. 31 (Questions on amendments), and agreed to.

MADAM SPEAKER forthwith declared the main Question, as amended, to be agreed to.

Resolved,

That this House deplores the Opposition's attempt to criticise the economic management of the Government as a feeble attempt to cover up their own appalling record of economic mis-management;


notes that under the Conservatives Britain slumped in the world prosperity league, saw the slowest period of growth since World War II, saw higher average inflation than in any other major industrialised country bar Italy, and had the lowest level of investment of any of the 24 OECD countries; also notes that the Conservatives left office with manufacturing investment lower than it was when they came to power, left Britain's share of world trade at its lowest ever, gave Britain a deficit on manufacturing trade for the first time ever, saw thousands of manufacturing firms go under due to their boom and bust policies, more than doubled the level of unemployment in their period in office, and left behind not a golden economic legacy, but an economy and public finances facing real difficulties; congratulates the Government on its prompt actions such as promoting the competitiveness agenda and fostering investment in R & D and innovation, and creating an open and transparent framework for monetary and fiscal policy to secure a platform of stability for growth and employment; and notes that the Government is addressing the problems which the Conservative Government left behind with positive practical proposals to take the nation into the 21st century.

EUROPEAN COMMUNITY DOCUMENTS

Motion made, and Question put forthwith, pursuant to Standing Order No. 119(9) (European Standing Committees),

COMMISSION WHITE PAPER ON RENEWABLE SOURCES OF ENERGY AND ENERGY FRAMEWORK PROGRAMME

That this House takes note of European Community Document No. 5140/98, a Commission White Paper entitled Energy for the Future: Renewable Sources of Energy, the unnumbered Explanatory Memorandum on the Council Resolution on Renewable Sources of Energy submitted by the Department of Trade and Industry on 16th March 1998, and European Community Document No. 13035/97, Annex I (a draft Decision adopting a multiannual framework programme for actions in the energy sector (1998–2002)), Annex IV (a draft Decision adopting a multiannual framework programme for the promotion of renewable energy sources in the Community: ALTENER II (1998–2002)), Annex V (a draft Decision adopting a multiannual programme for the promotion of energy efficiency (1998–2002): SAVE II), and Annex VI (a draft Decision adopting a multiannual programme of technological actions promoting the clean and efficient use of solid fuels: CARNOT (1998–2002)); and supports the Government's view that actions should be taken to promote a greater use of renewable energy within Europe, in line with the principle of subsidiarity, and that measures to promote renewables should be compatible with the need to restrain public expenditure and avoid disproportionate costs for consumers and industry; and supports the Government's view that EU spending programmes with an energy component should, as far as practicable, be brought together in a framework programme to improve co-ordination and transparency.—[Mr. Allen.]

Question agreed to.

BUSINESS OF THE HOUSE

Ordered,

That, at the sitting on Wednesday 8th April, the Speaker shall not adjourn the House until she shall have notified the Royal Assent to Acts agreed upon by both Houses.—[Mr. Allen.]

PETITION

Green Belt (Surrey)

Mr. Peter Ainsworth: I beg leave to present a petition signed by more than 5,000 residents of east Surrey, expressing their concern about the threat of large-scale new developments in the green belt and countryside. The petition states:

The Petitioners therefore request that the House of Commons urge the Secretary of State for the Environment, Transport and the Regions to ensure that more homes are built in city areas, instead of the countryside or Green Belt, to breathe new life into our cities and to protect valuable countryside for future generations.

To lie upon the Table.

Electronic Government

Motion made, and Question proposed, That this House do now adjourn.—[Mr. Allen.]

Ms Margaret Moran: At the outset, I should make clear that I am not an information technology anorak—with the greatest respect to all those who understand the details of all things technological and digital. I secured this debate because I believe that we are on the cusp of a quiet revolution—a revolution in which electronic government can enable us to reinvent government in the way in which we provide public services and reinvigorate democracy. The opportunities of electronic government can enable more efficient delivery of services, greater transparency and access to information, and have potential to empower the citizen and transform democracy.
My passion for the potential for electronic government dates from 1994. It arose due to my concern, as the then leader of Lewisham council, about low levels of participation in local government and low voter turnout. I recognised the need to transform our services, breaking down old departmental divisions and bringing services closer to people. The need to enhance our citizens' role in decision making is also key.
In 1994, we started the democracy project—the "Lewisham Listens" experiment—using new technology to put citizens at the heart of government and enhance local democracy. The experiment included community forums, one of the first citizens' juries, a community plan, video boxes, one of the first council community websites, an award-winning European funded teledemocracy project using interactive IT, and teletalk, using video conferencing in libraries to increase access to services and receive our citizens' views on any aspect of our work.
Subsequently, GALA was developed, providing interactive television kiosks around the borough and in shopping centres, covering health, education, local environment, transport and tourism. Although I was accused by some of my colleagues of encouraging couch-potato democracy, I believe that we learned a great deal and showed that local government is on the leading edge of electronic government.
Since then, of course, electronic government has moved on, with Bristol's plans for a digital city, for example. In my constituency, the Ladman partnership involving Luton and South Bedfordshire councils, Cabletel, Luton university and Luton airport will assist economic regeneration by training and networking local and worldwide business. It also plans to provide free e-mail for all.
Until now, local government's attempts to develop electronic government have been hindered by lack of support from central Government—but no longer. The new Labour Government are promoting new government using new technology, as demonstrated by the commitment of my right hon. Friend the Prime Minister to ensuring that 25 per cent. of all services are electronically delivered by 2002.
The Government are already encouraging greater use of new technologies by business, such as the electronic form for the self-employed, which I saw piloted recently at NatWest in Luton. In education and training,

£350 million has been committed to the national grid for learning and the forthcoming university for industry, and in Luton alone, we received one of the largest grants in the country for our central library to increase access to IT. All that signals a Government who are committed to bringing information technology access and skills to all our community for the millennium and beyond.
The big picture is not just a series of IT initiatives. The Government could lead a global revolution in electronic government. While some countries are galloping ahead in electronic government, such as the Malaysian Government with Malaysia on-line, our United Kingdom information and communication technologies infrastructure is peerless, we are information-rich, and we lead our European counterparts by several leagues. The real challenge for us now is to harness the full potential of the information society to get maximum gain for all our people. The "Better Government" White Paper offers such opportunities. It could lead the way in a fundamental change in the relationship between citizen and government.
The deep sense of disillusionment with government, which prompted my democracy project in 1994, remains. Restoring faith in and reinvigorating democracy remains the most important challenge for all politicians.
Transforming public services via electronic government to provide "joined-up " government will be crucial in that democratic renewal. However, that alone is not enough, and therein lies the real challenge in which electronic government has a key role. The challenges seem to be—first, how do we re-engineer government in a way which has a bottom-up approach and which allows Government to maximise citizen participation?
Secondly, how do we ensure that information is available to citizens in a way which empowers? In the last few weeks, we have seen the development of intelligent mark-up so that citizen access could be improved. Government must have a strategy on this, and recognise, for example, that it may mean that the old methods of civil servants drafting Green and White Papers is obsolete. More important may be how information is tagged, so access, usable information and maximum use of IT infrastructure are key.
Thirdly, the Government need to use the developments in technology. IT' s development has a hard commercial edge, but the Government should be hitching a ride to advance electronic government. They can do so by providing vision and leadership and by acting as a kind parent, setting down guidelines for the industry to govern itself and using opportunities to enhance public service and democratic participation. The development of digital broadcasting is such an opportunity. Interactive television in every living room could be used for lifelong learning and citizen participation, particularly by usually excluded groups.
The opportunities are endless. It is not just about voting at Tesco or consultation by cashpoint—there is the development of e-democracy, electronic town meetings, interactive participation and priorities for local government, or using our plans for pre-legislative scrutiny to include electronic and digital consultation. The rewards are great, as we discovered in assessing the democracy project. Using new technology to involve citizens in decision-making works. The proof that it overcomes apathy and is an important new democratic tool is the 95 per cent. satisfaction rate recorded.
The fourth challenge to the Government—one which they are already seizing through investment in IT in schools and libraries—is access. However, the IT-rich and poor are not as obvious as some would believe. Digital broadcasting will revolutionise access, but there is evidence that, where IT access is promoted, it is young people, women and older unemployed citizens who get involved. The Lewisham democracy project showed that teletalk and teledemocracy pilots were particularly well used by people with disabilities and people with English as a second language, and that over half the teletalkers were over 50, with black and ethnic minorities over-represented.
It is no coincidence that the school most advanced in IT in my constituency—for which I performed a virtual launch of its website recently—is Dallow junior. Some 98 per cent. of the pupils are Kashmiri or Bangladeshi, who live in one of the most deprived areas in the UK, where, in some homes, an inside loo is a luxury, let alone a computer. I also welcome the initiative of schools such as Stopsley junior, which is opening its doors to the community to take part in the IT revolution.
The final challenge is to Parliament. We are in danger of becoming the IT-poor. Can we lead electronic government while this place is so far behind? I believe that it is not just for the Government but for each of us to lead in the electronic government project. For those who wish to lead by example, I would say, "Please help, not hinder." For example, I hope that we will make it easier for all Members to develop community websites. My website—the Luton democracy pages, at www.enablis.co.uk/margaret moran—is a small contribution.
My thanks go to the pupils from Surrey Street school, who won my competition to design a website poster. My website and my on-line interface between Westminster and my constituency attempt to provide links to local businesses and schools and to provide community networks. I will be holding virtual surgeries on the site soon. Watch out, Luton—I have plans for a cyber soap box in Luton town centre. Eat your heart out, John-boy. So, is the next step the virtual Member of Parliament? My answer is resoundingly no—not if we take up the challenge of the electronic and digital world.

The Parliamentary Secretary, Office of Public Service (Mr. Peter Kilfoyle): I am grateful to my hon. Friend the Member for Luton, South (Ms Moran) for initiating this debate on electronic government. I readily share her enthusiasm for new technology and how it can be used to improve the quality and efficiency of public services. I must confess that, like her, I am not an expert, but nevertheless it is our function as elected representatives—certainly for those of us in government—to recognise the opportunities presented to us by developments in electronics, to increase the efficiency of our public services.
In particular, I congratulate my hon. Friend on her time as leader of Lewisham council which, as she remarked, used the teletalk project to pioneer the use of electronic kiosks, to provide information about local services. I do not think that she will mind if I say that Lewisham is

quite an advanced council in that context. Certainly, it has also set up a citizens panel that bears marked similarities to the people's panel that we have established. As she also pointed out, she is a keen on-line Member of Parliament. My right hon. Friend the Chancellor of the Duchy of Lancaster was one of the judges of the competition that she set up for local kids, to design a poster advertising her parliamentary website.
Developments in information technology make what we call joined-up government possible in ways not even imagined 10 years ago. As my right hon. Friend the Prime Minister said in his speech to the Labour party conference last October, we are planning an IT revolution with the aim that a quarter of the services that Government provide can be delivered electronically within five years. We must remember that our economic competitors are doing likewise. The United States certainly has ambitious aspirations for the delivery of electronic government.
Clearly, people want efficient and effective service that is easy to access and flexible enough to deal with their particular situation, and it is equally clear that the public sector is being left behind by advances in the range and quality of the services provided by the private sector. We recognise that the plain fact is that ordinary users of public services—services with which people come into contact almost every day—do not differentiate between the parts of Government that provide them.
It is not important that it is the local authority or Government agency, one Whitehall Department or another. What the citizen and small business want is more effective service, with greater and more user-friendly access to information and services. It is no secret that, for the vast majority of people in Britain, Government services could be that bit better. They could be that bit more modern and that bit more like the private sector services to which people have become attuned.
As a Government, we are determined to see an end to the current situation, when people on benefit have to inform up to six agencies if they move house, businesses have to cope with up to 10 different inspectors and young people have 11 bits of Government to go to for help and assistance. That is why the forthcoming "Better Government" White Paper will be about simplifying those encounters. It will be about turning government the right way up—starting with the individual, family or business that needs a service rather than with the professional, the administrator or indeed the politician who provides it.
Above all, "Better Government" will be about redesigning Government services, so that they truly focus on the citizen, and we intend to use technology to achieve that. The Government see internet and intranet services and technologies as the key to the successful delivery of user-friendly Government services to the citizen and business, particularly the small business. We are already widely using intranet technologies within Departments.
In addition, central Departments now have the potential to access the newly established Government secure intranet, which enables secure interconnections across a range of departmental IT systems. The GSI will facilitate a more coherent, customer-focused and integrated electronic service delivery to citizens and businesses, by providing security for information that is entrusted to the Government and by allowing unrestricted access to the internet where required. The service is currently being used by a number of Departments, and others are expected to join during 1998.
The GSI enables Departments to communicate securely by e-mail and to benefit from access to, and the ability to receive communications over, the internet. It will also support directory and other intranet services. It should enable the Government to exploit more fully their knowledge and databases, to search the internet and to communicate more effectively with key users. It will also provide a means of linking up and promoting the increasing volume of Government services that are available electronically.
The infrastructure to deliver intranets is growing rapidly in the private sector. The Government believe that full advantage should be taken of that technology to link Departments to one another and to the populace at large.
The GSI is the result of a successful partnership with a private sector contractor—a partnership that offers a model for further co-operation between the public and private sectors. For that to happen, we need to work in partnership not only with IT companies, but with local government.
We are keen to encourage closer working between central and local government. That is why my right hon. Friend the Chancellor of the Duchy of Lancaster has been asked to chair a ministerial committee, including local government representatives, which is specifically charged with building on our respective strengths and with delivering linked services to the ordinary person.
In initiatives such as the new deal, we are mobilising partners to deliver key changes. We have also been holding a series of seminars with participants from academia and the media, as well as from the public, private and voluntary sectors. The discussions have been stimulating, and many positive ideas have been raised. Moreover, we have invited the public sector unions to come forward with ideas on how to involve front-line staff in shaping the "Better Government" programme.
There are bound to be different organisations delivering public services, but IT will provide, first, more scope for public servants to guide people across the gaps and round the systems and, secondly, the chance for the public to do that themselves. As my hon. Friend reminded the House, central Government can learn much from localised projects and local authorities in understanding what people want from public services and how best to deliver them. That is why we established direct.link to act as a forum for public sector and voluntary bodies that are engaged in projects to provide electronic services to the citizen.
There are already many such projects throughout the United Kingdom—many of them involve local authorities, which have gained valuable experience. They are not only

willing to share that experience, but want to learn from others' experience. Direct.link is the forum in which that can happen. It creates a link in the chain that we are forging to deliver better public services.
As the House will be aware, we have set up a series of pilot schemes to test public reaction to electronic service delivery. In December, we launched the latest of those projects—the intelligent form—which is being piloted in six locations, including my hon. Friend's constituency.
The new pilot uses clever-forms software, the internet and digital signatures. It helps someone to register as self-employed, by cutting down on the unnecessary duplication of effort and on the number of forms to be filled in. In the not too distant past, people wanting to register as self-employed had six forms to complete for three Government Departments—the intelligent form enables them to do that in one go.
The intelligent form is also a partnership. The Inland Revenue, Customs and Excise and the Contributions Agency worked not only with Microsoft and Electronic Data Systems, but with banks, in whose branches the citizen can access the service.
The intelligent form is an example of "Better Government" in action, working across public and private boundaries to focus on a particular life episode. Not only does that allow people to submit information to Government over the internet securely, quickly and accurately, but for the first time complex legal, administrative and technological obstacles have been overcome to produce the first Government-recognised electronic signature. Of course, the potential for application elsewhere is huge.
Last week, we published the interim report on our market research into public attitudes towards electronic government. Respondents were extremely positive about the possibility of electronic delivery of Government services. The message to us is clear: the public expect Government to use information technology to enhance the quality of their lives, not only to make things easier, but to open up new opportunities for them.
That is precisely what we intend to do. We are confident that our "Better Government" programme, with its emphasis on new technology, will set the pace not only in this country but overseas, as we turn our vision for the 21st century of electronic government into a reality at the service of all our people.

Question put and agreed to.

Adjourned accordingly at twenty-five minutes to Eleven o'clock.